Russia has made dollar payments Eurobonds into rubles, but investors are unlikely to be able to convert these payments into rubles into dollars.
International rating agency S&P Global Ratings downgraded Russia’s foreign currency ratings to “selective default”. The reason is the increased risks that Moscow is unable and unwilling to fulfill its obligations to foreign debt holders. On Saturday, April 9, Reuters reports.
S&P noted that Russia made coupon and major dollar payments on Eurobonds in rubles on Monday.
“We currently do not expect investors to convert these payments into rubles into dollars equal to the amounts originally due, or that the government will convert these payments within 30-days. extended, “S&P said.
According to the agency, sanctions on Russia are likely to be further tightened in the coming weeks, which “will hinder Russia’s readiness and technical ability to comply with the terms of its obligations to foreign debt holders. “
It was noted that facing waves of sanctions related to the invasion of Ukraine, Russia could face its first sovereign external default in more than a century. Russia has not defaulted on its foreign debt since the 1917 revolution, but its bonds have now become a flashpoint in its economic struggle with Western countries.
S&P assigns a selective default rating when it believes a debtor has selectively failed to meet its obligations under a particular issue or class of obligations, but will continue to fulfill its payment obligations on other issues. or class obligations in a timely manner.
Recall that in mid -March, S&P downgraded Russia’s credit rating to CC, which means “a default is more likely.”
Prior to that, Russia paid off its debts, avoiding default. The Ministry of Finance announced that it had paid coupons to the sovereign Eurobonds of the Russian Federation.
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Source: korrespondent
