Russian Finance Ministry refuses to acknowledge foreign debt default

The Russian Ministry of Finance reported that investors did not receive the foreign debt payments from Russia "due to the actions of third parties, rather than for the absence of payment." Such circumstances are not defined in issuance documentation as a default event.

The Ministry made two payments — $71.25 million and €26.5 million — on May 20.

International settlement and clearing systems received "the funds in advance in full." However, "having the legal and financial ability to wire the funds to the final recipients, they have not taken the necessary actions for this purpose," the ministry said.

"Please note that, in accordance with the issuance documentation for these issues, a default event is defined as debtor's failure to pay. However, the payment was made in advance — on May 20, 2022,” the ministry said in a statement.

"The Russian Federation has not refused to fulfill its debt obligations to all categories of investors,” the Finance Ministry added. "To this end, in the absence of a technical possibility for making payments in foreign currencies, the Russian Federation offered investors a new settlement mechanism in accordance with the decree signed by the President of the Russian Federation," the Finance Ministry said.

Putin signed the decree about temporary payments of Russia's foreign debt in Russian rubles on June 22.

Also read: Default in Russia? Not our problem - Kremlin

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Author`s name Editorial Team
Editor Dmitry Sudakov