The Ministry of Finance said it was ready to settle the “default” on interest for $1.9 million

The Credit Derivatives Committee previously acknowledged non-payment on Russian Eurobonds with additional interest due in 2022 for $1.9 million.that it is ready to settle claims bilaterally

The Ministry of Finance of RUSSIA is ready to settle claims regarding the completeness of the fulfillment of debt obligations under Eurobonds "Russia-2022", the press service of the department reported.

A number of owners of Russia-2022 external bonded loans had claims against the Ministry of Finance to pay additional interest for the period from the set maturity date of these bonds - April 4, 2022 - until the date the funds were actually transferred to the owners, the department said. However, investors received funds after April 4, because "foreign counterparties performed their functions in bad faith when redeeming these bonds." Although the delay was caused by “merely misconduct by foreign financial intermediaries,” a number of investors view the delay as deliberate on Russia’s part.

“The Russian Ministry of Finance informs that it is ready to consider and, if there are necessary grounds, settle bilaterally all claims regarding the completeness of the fulfillment of debt obligations under Russia-2022 Eurobonds,” the ministry said.

Default Insurance Regulator Recognizes Russia's “Non-Payment” on Eurobonds Economics

The Ministry of Finance also announced that the London branch of Citibank from May 24 ceased agency functions for four issues of Russian Eurobonds maturing in 2023, 2028, 2042 and 2043. “The function of the paying agent and other functions for the indicated bond issues were transferred to NBCO JSC National Settlement Depository in accordance with the law of the Russian Federation,” the ministry said in a statement.

The day before, on June 1, the Credit Events Committee of the International Swaps and Derivatives Association (ISDA) recognized a credit event of “non-payment” (Failure to Pay, informally equivalent to a default for the purpose of paying default insurance) on DOLLAR Eurobonds of the Ministry of Finance of Russia with a maturity date of April 4 2022.

Siluanov explained Russia's desire to avoid default

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We are talking about dollar bonds of the Ministry of Finance, the balance of which for $552 million Russia was supposed to pay off on April 4. But then the United States did not renew the license, which gave Russia the opportunity to pay its debts from frozen reserves, and the Ministry of Finance initiated the fulfillment of the obligation in rubles. Western market participants prepared to default on these bonds, citing an uncoordinated change in the currency of payment, but the Ministry of Finance at the end of April managed to bring funds in dollars to foreign investors.

On May 11, the former holders of these securities, who received the principal payment by May 2, filed a notice of Russia's default with the Euroclear clearing system. They pleaded that they had not received the additional $1.9 million in interest accrued for the period from April 4 to the actual maturity date of the bonds. Russia, when paying off the principal at the end of April, did not include this additional interest in its payment, they argue.

See also Siluanov announced the default of the West on obligations to Russia 00:47

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