Russia Defaults on Foreign Debt for First Time Since 1918

[BumRushDaShow]

37. (late) NYT breaking on this now, but adds another tidbit of a caveat

Russia Misses Bond Deadline, Signaling Its First Default on Foreign Debt Since 1918


By Eshe Nelson

June 27, 2022 Updated 8:49 a.m. ET

Russia missed a deadline for making bond payments on Sunday, a move signaling its first default on international debt in more than a century, after Western sanctions thwarted the government’s efforts to pay foreign investors. The lapse adds to efforts to seal Moscow off from global capital markets for years.

About $100 million in dollar- and euro-denominated interest payments failed to reach investors within a 30-day grace period following a missed May 27 deadline. The grace period expired Sunday night.

A formal declaration of default would need to come from bondholders because ratings agencies, which normally declare when borrowers have defaulted, have been barred by sanctions from reporting on Russia. The Credit Derivatives Determinations Committee, a panel of investors that rules on whether to pay out securities linked to defaults, hasn’t been asked to make a decision on these bond payments yet.

But it appeared that the payments had not reached bondholders’ accounts as of Sunday night, as required by the bonds’ contracts. On Monday, Russia’s finance ministry said it had made the payments in May and they had been transferred to Euroclear, a Brussels-based clearinghouse, but subsequently blocked from reaching bondholders.

https://www.nytimes.com/2022/06/26/business/russia-default.html