The Russian Finance Ministry said on June 24 that it had transferred the amount of 8.5 billion rubles ($159 million) of Eurobond bond yields in USD to the National Depository for Payments, when the risk of default was closer than ever.
The obligation to pay interest on bonds of the Russian Federation shall be fully fulfilled by the Ministry of Finance of Russia.
The aforementioned Eurobond bonds mature in 2028.
The payment of the same amount of interest was made on June 23 with the bonds maturing in 2027 and 2047.
Russia has difficulty making payments. 40 billion USD worth of international bonds since the impact of sanctions related to the military campaign in Ukraine.
Bonds denominated in USD often have terms that provide that payment can be made in euros, pounds and Swiss francs depending on the situation.
However, Ruble is not a currency that can be used for payment.
To avoid the risk of default, payments must be transferred to the creditor’s account in the specified currency on time, which may include a 30-day grace period.
Russia argues that paying in rubles allows Russia to fulfill its payment obligations due to restrictions that make it impossible for it to use foreign currency.
Russian President Vladimir Putin on June 22 signed a decree establishing temporary procedures to fulfill Russia’s foreign debt payment obligations when the country faces the risk of default.