A $117 million interest payment due on two bonds was made to Citibank in London, according to Russia’s Finance Ministry, amid rising rumours that the country is on the verge of defaulting.
The ministry disclosed this to Bloomberg and stated that it will comment separately later on whether the payment had been credited. Citibank is Russia’s Eurobond payment agent.
Nairametrics earlier reported that Russia’s finance ministry said a temporary mechanism for repaying foreign currency debt had been approved but warned that payments would be made in roubles if banks were unable to honour debts in the currency of issue due to sanctions.
However, making a settlement in a currency other than the dollar within the grace period, according to Fitch Ratings, would be regarded as a default. Earlier this month, S&P Global Ratings made a similar conclusion.
The rating can be lowered to default by rating agencies, or the problem can be decided by a court. Bondholders with credit default swaps derivatives, which operate as anti-default insurance plans, can petition a “determinations committee” of financial firm representatives to assess whether a failure to pay should trigger a payout, which is still not a formal declaration of default.
For further inquiries about this article, contact: Email: Ifeanyi.ubah@nairametrics.com Twitter: @ubahjc Linkedln: Jeremiah Ubah
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