Russia misses bond interest payment as potential default loomsBy Thomas Barrabi
June 1, 2022
Russia committed a “failure to pay” credit event when it missed a $1.9 million interest payment on one of its sovereign bonds in April, an international committee determined Wednesday — a sign that the Kremlin is edging toward its first foreign debt default since World War I.
Russia violated the terms of an international dollar-denominated bond that matured on April 4 after it failed to include the interest payment within a grace period, according to the results of a vote by members of the Credit Derivatives Determinations Committee, a group of institutions that oversees the derivatives market.
Credit Suisse, Goldman Sachs, JPMorgan Chase and Barclays were among the financial institutions that voted to confirm a “failure to pay” event.
Russia initially attempted to pay the dollar-denominated bond in rubles – a move that would have triggered a default – only to reverse course and transfer payment in dollars within a 30-day grace period. But the late payment did not include the $1.9 million in interest that accrued during the delay, Bloomberg reported.
Investors asked the committee to rule on whether Russia was in violation of the terms as they sought to collect on credit-default swaps, which function as a form of insurance against nonpayment of bonds.
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Source:
https://nypost.com/2022/06/01/russia-misses-bond-interest-payment-as-potential-default-looms/
