Russia-Ukraine war, Moscow (again) avoids default: coupons paid for 650 million dollars on two Eurobonds – Il Fatto Quotidiano

There Russia dodge the default another time, paying on the wire – one day before the deadline – 649 million dollars for two Eurobonds that expired on 4 April and enjoyed a one-month ‘grace period’. According to reports Bloomberg three investors had their coupons in dollars credited to their accounts. A new episode in the financial war that Moscow is conducting in parallel with the military one and which has seen the Kremlin renege on the threat of repaying in rubles the sums due and draw on yours reserves in dollars which are gradually decreasing due to the costs of the warbut are replenished by the influx of resources in the form of payments for gas And petrolium exported to Europe and not yet affected by sanctions.

The compromise is also the work of Washington: even if the US Treasury has not specifically authorized the transaction, theOfac, the body that monitors flows continued to apply a loophole allowed the sanctions regime by letting dollars flow into the agent bank account, Citigroup, which is gradually crediting the sums to investors. In early April the Kremlin had threatened lawsuits in the event that the US prevented Russia from paying interests by blocking the operation of Russian accounts with national banks. Barring last-minute surprises – the money must arrive by tomorrow – the default that was almost certainly given by the rating agencies is therefore averted. Or at least postponed.

ThereGeneral License 9A‘allowed by the US authorities, it expires on May 25, and two days later, on the 27, Moscow must once again put its hand to the portfolio for the coupons of two bonds, in euros and dollars, with maturities in 2026 and 2036. Which, however, unlike those expired a month ago, they offer alternative ways if Moscow cannot pay for reasons beyond its control: pay in rubles for the euro bond, pay in a place other than New York, such as Switzerland or the United Kingdom, for that in dollars . The saga of default continues as markets grapple with new ones gas record in New York and with returns inflamed by the monetary tightening looming on the horizon: over 3% for the ten-year US treasury2% for British gilts and 1% for the Bund, the highest since 2015, with Italy’s spread at 192.

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Russia-Ukraine war, Moscow (again) avoids default: coupons paid for 650 million dollars on two Eurobonds – Il Fatto Quotidiano


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