news unrolled

Post: Bloomberg declared a “default” in Russia

Categories

Moscow. archive photo

Bloomberg unveils first “default” in Russia since 1918

MOSCOW, June 27 – RIA Novosti. American agency Bloomberg claimsIn Russia, there was a “default” on Monday night – for the first time since 1918.

On May 27, the Russian Ministry of Finance was required to pay coupons in dollars and euros for two sovereign Eurobond issuances maturing in 2026 and 2036, but while doing so in advance, the US Treasury later refused to renew the license and therefore permission was granted. Russia will pay its foreign debt within the framework of sanctions. The payment broker – the National Settlement Deposit – received funding to pay off Russian Eurobond proceeds of US$71.25 million due in 2026 and €26.5 million due in 2036. However, as Bloomberg previously wrote, the owners did not pay them and the monthly grace period has expired to raise funds for investors.

The agency explains the “default” status by the fact that these terms expire on the night of Monday, June 27. At the same time, Bloomberg writes that the “default” so far has been “mostly symbolic and means little to Russians”.

Russia defaulted on its sovereign currency debt for the first time in a century, resulting in increasingly harsh Western sanctions that cut off all means of payment to foreign creditors.

Still, the agency explains that the official announcement usually comes from rating agencies, but European sanctions have led Russian agencies to downgrade their ratings. The grace period can be announced by the holders themselves if the holders of 25% of the outstanding bonds agree that a “default event” has occurred, according to the documents for bonds expiring Sunday.

Earlier, Anton Prokudin, chief macroeconomist at Ingosstrakh Investments, told RIA Novosti that a possible default on state Eurobonds for Russia is no longer important to the West, “Russia has already defaulted.”

Last Thursday, Russian Finance Minister Anton Siluanov said that the termination of Russian Eurobond payments in foreign currency and the transition to the ruble scheme does not mean default, it is due to a force majeure situation, and the Russian Federation does not reject it. fulfills its obligations and takes all measures to provide full funding to investors. At the same time, according to the minister, the creation of artificial barriers to service the state debt of the Russian Federation seems absurd, this is necessary in order to hang the “default” label. He also expressed the opinion that in this case, it would be correct to consider the refusal of foreign financial intermediaries to fulfill their obligations as “default”. Siluanov said that it makes no sense for foreign investors to try to default Russia’s foreign debt through courts that are ready to fulfill all their obligations, and that bondholders can come and get their money right away.

Western countries had previously brought various sanctions packages against the Russian Federation due to Ukraine. Russian President Vladimir Putin said that the policy of containing and weakening Russia is a long-term strategy of the West and that the sanctions have dealt a serious blow to the entire world economy. According to him, the main purpose of the West is to make the lives of millions of people worse. Putin also said that the United States and the European Union have de facto not fulfilled their obligations to Russia and froze their foreign exchange reserves. He added that current events draw a line under the global domination of the West, both in politics and economy.

Source: Ria

Leave a Reply

Your email address will not be published. Required fields are marked *