Russia on Monday rejected claims it had defaulted on its foreign debt for the first time in more than a century, telling investors to turn to Western financial agents for money that was sent but bondholders did not receive.
The White House said on Monday that Russia defaulted on its international bonds for the first time since the Bolshevik revolution, as sweeping sanctions effectively excluded the country from the global financial system.
Until last week, Russia continued to pay its Eurobonds in foreign currency according to the conditions laid down in the issuance, but transfers of coupons in dollars and euros made in May, before the expiration of a US exemption that allowed these transactions, did not arrive. to investors.
“The default statements are absolutely unwarranted,” Kremlin spokesman Dmitry Peskov said in a call with reporters on Monday, noting the May foreign-currency coupon payment.
“The fact that Euroclear withheld this money and did not take it to the recipients is not our problem. There is absolutely no reason to call such a situation a default.”
Euroclear did not immediately respond to a request for comment.
On Monday, the Ministry of Finance said that “the actions of foreign financial intermediaries are beyond the control of the Russian Ministry of Finance”, urging foreign bondholders to speak directly to those holding the payments.
“The non-receipt of money by investors did not occur due to lack of payment, but due to the actions of third parties, which is not directly explained as a situation of default by the issuance documentation,” the ministry added.
As a US exemption expired and the European Union sanctioned Russia’s National Settlement Depository (NSD), Moscow paid in rubles last week the next expiring coupons in foreign currency.
President Vladimir Putin last week ordered debt obligations to be considered fulfilled once a payment in rubles equivalent to the value in foreign exchange has been made. Bondholders would need to open an account with a Russian bank to receive payment.
Moscow will not block the conversion of the payment into foreign currency and its transfer abroad, but investors would need to say in writing that they have no complaints against Russia, the ministry said. The banks have not yet been announced.
Source: CNN Brasil
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