Russia would have entered into suspension of foreign payments, according to Bloomberg

First modification: 06/27/2022 – 19:01

Russia reportedly defaulted on its sovereign debt in foreign currency for the first time in a century as a result of Western sanctions that closed all avenues of Russian payment for foreign creditors.

This Sunday the grace period of the interests that expired on May 27 ended, a term considered as non-payment if it is not met.

It is the “culmination of increasingly severe Western sanctions” on Russia for its “special military operation” in Ukraine – which have blocked the avenues of payment to foreign creditors.

Moscow claims to have made the payment on May 20

However, the Russian Ministry of Finance claimed to have paid “in full” the foreign debt service in line with current emission rules and accused “third parties” of the information about an alleged “suspension of payments”.

“Such payments were received on the same day by Eurobond brokers and delivered in a timely manner to both Russian Eurobond holders…and international financial brokers,” the statement said.

Moscow assures that it cannot have committed non-payment, since it was made on May 20 and the due date was May 27. “In this case, the inability of investors to receive their money did not take place as a result of non-payment, but due to the actions of third parties,” they argued.

Russia proposes new payment mechanisms

According to Russia, the behavior of the mediators is beyond the control of the Russian authorities and they assure that “it does not refuse to fulfill its debt obligations to all categories of investors”, but rather, given the technical impossibility of completing the payment in foreign currencies, proposes “new payment mechanisms”.

The payment in rubles was made by virtue of a decree of the Russian president, Vladimir Putin, according to which, “the obligations against the Eurobonds of the Russian Federation are recognized as fulfilled if they are made in rubles for an amount equivalent to the value of the foreign currency obligations.

Moscow accuses the West of preventing the payment of its debt with measures such as the blockade of its national depositary by the European Union and the non-renewal by the United States of the license that allowed Russia to pay its debt in dollars.

with EFE