The American bank JP Morgan would have received from the Russian central bank the payment intended to pay the coupons due on March 16, after consultation with the American authorities, according to a source quoted by AFP. This payment was transmitted to Citigroup, which is in charge of distributing this money to the holders of the Russian bonds concerned. Neither JP Morgan nor Citigroup wished to confirm this operation.
However, this payment validates the information from the Russian Ministry of Finance, which has been repeating since Wednesday that it has made these payments on time, thus immediately avoiding the possibility of default on Russian debt denominated in foreign currencies, which would have been a first since 1917.
Payment made in dollars, not rubles
“The payment order on the payment of interest on bonds (…) with a total value of 117.2 million dollars (…) has been executed”, had notably indicated, in the morning, the ministry in a press release. The ministry then clarified that it had sent the funds to a foreign bank on Monday and made the payment in dollars, not rubles.
Moscow had until Wednesday March 16 at the latest to pay these 117 million dollars, the first installment of a series of others expected in March-April, but the bondholders concerned affirmed yesterday evening that they had not yet received nothing.
JP Morgan acted as one of the intermediary banks carrying out transactions on behalf of the Russian central bank, the source quoted by AFP said, without giving details on the amount of the sum received.
Western sanctions taken in retaliation for the Russian military invasion of Ukraine include, among other things, the freezing of Russian reserves held abroad. This raises fears that Moscow will no longer be able to repay its debts, and is therefore threatened with default. In the meantime, everyone is waiting for the reopening of the Moscow Stock Exchange, scheduled for March 25.