The rating agency S&P (Standard & Poor’s) on Saturday reduced Russia’s external credit rating to “selective default” in the face of greater risks that Moscow will not be able to honor commitments with international creditors.
The West has condemned Russia to waves of sanctions after the invasion of Ukraine. The country could experience its first sovereign foreign debt default in more than a century after it made arrangements to repay an international debt bond in rubles instead of dollars.
S&P said it recorded that Russia made rubles on Monday (4) coupon and principal payments on dollar-denominated eurobonds.
“We do not currently expect that investors will be able to convert these dollar ruble payments into the amounts originally due or that the government will convert these payments within the 30-day grace period,” S&P said.
Sanctions against Russia are likely to be increased in the coming weeks, the agency said, “undermining Russia’s technical ability to honor the terms and conditions of its obligations to foreign bondholders.”
S&P determines a “selective default” rating when it believes that the obligor has taken steps to default on a particular debt issue or class of obligations, but will continue to meet its payment obligations on other securities.
Russia has not defaulted on its foreign debt since the 1917 revolution. A default was unimaginable until recently, as the country was considered investment grade until the February 24 invasion of Ukraine.
Source: CNN Brasil
I am Sophia william, author of World Stock Market. I have a degree in journalism from the University of Missouri and I have worked as a reporter for several news websites. I have a passion for writing and informing people about the latest news and events happening in the world. I strive to be accurate and unbiased in my reporting, and I hope to provide readers with valuable information that they can use to make informed decisions.
