Standard & Poor’s downgraded Russia’s foreign currency bonds to “selective default” (SD) today, citing growing risk that Moscow may or may not be able to continue to meet its obligations. to foreign bondholders.
Russia may face its first foreign debt arrears in a century this year as it settles to pay interest on its securities in rubles this week, although the payment is due in dollars.
“At the moment we do not expect that investors will be able to convert these payments into rubles in dollars corresponding to the amounts originally owed or that the government will convert these payments within the 30-day grace period.”
Sanctions against Russia are expected to widen further in the coming weeks, the house said, reducing Moscow’s “willingness and technical ability” to meet “the terms and conditions” for repaying its debts to Russian-held foreigners. government bonds.
Russia’s finance ministry said this week that Moscow would do all it could to meet its obligations to foreign creditors. The bondholders will be in uncharted waters if the Russian government declares a selective or general moratorium on payments.
Source: Capital
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