25.05.2022, 13:11
The Financier Called the Date After Which the West May Declare Default on Russia
Source: OREANDA-NEWS
OREANDA-NEWS If the next payment of Russia's Eurobonds in the amount of $235 million on June 23 does not reach creditors, then Western institutions may declare a technical default on Russia's external obligations, Vasily Karpunin, head of the information and analytical content department at BCS Mir Investments, told NEWS.ru. The financier added that after another 30 days of the grace period, a technical default could turn into a real one. Thus, he commented on the refusal of the US Treasury to renew the license to service the external debt of the Russian Federation.
The expert added that the situation is "ambiguous", since the Ministry of Finance of the Russian Federation has "the means and desire" to service debts, but cannot do this "for reasons beyond the issuer's control."
"The next payments on Russian Eurobonds maturing in 2026 and 2036 in the amount of $73.3 million and €26.5 million, respectively, scheduled for May 27, were sent in advance. The next payment for $235 million is due on June 23. If creditors do not receive payments , then Western institutions have the right to declare a technical default on the external obligations of the Russian Federation, which, after a 30-day grace period, will turn into a real default. is interpreted differently from the point of view of reputational risks. There is no impact on the Russian economy. The Russian Federation has no need for external financing," said Karpunin.
Earlier it became known that the US Treasury Department would not renew a license allowing Russia to service external debt under sanctions. The license expires on May 25 at 07:01 Moscow time, and its absence will prevent Americans from receiving payments from the Treasury for servicing Russian sovereign bonds denominated in both dollars and euros. According to Bloomberg, this increases the already high chances of Russia's default, but so far it cannot be said that because of Washington's decision, the Russian Federation will fall below this line.
The expert added that the situation is "ambiguous", since the Ministry of Finance of the Russian Federation has "the means and desire" to service debts, but cannot do this "for reasons beyond the issuer's control."
"The next payments on Russian Eurobonds maturing in 2026 and 2036 in the amount of $73.3 million and €26.5 million, respectively, scheduled for May 27, were sent in advance. The next payment for $235 million is due on June 23. If creditors do not receive payments , then Western institutions have the right to declare a technical default on the external obligations of the Russian Federation, which, after a 30-day grace period, will turn into a real default. is interpreted differently from the point of view of reputational risks. There is no impact on the Russian economy. The Russian Federation has no need for external financing," said Karpunin.
Earlier it became known that the US Treasury Department would not renew a license allowing Russia to service external debt under sanctions. The license expires on May 25 at 07:01 Moscow time, and its absence will prevent Americans from receiving payments from the Treasury for servicing Russian sovereign bonds denominated in both dollars and euros. According to Bloomberg, this increases the already high chances of Russia's default, but so far it cannot be said that because of Washington's decision, the Russian Federation will fall below this line.
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