NEW YORK: Russia's coupon payment on a sovereign bond maturing in 2029 was received on Monday, a bondholder said yesterday, adding the payment was in US dollars - the second time in recent days the country appears to have averted default.
Russia had been due to make a US$66 million (RM278 billion) payment to bondholders on Monday on the bond.
The payment was processed by correspondent bank JPMorgan Chase & Co, a separate source said on Monday.
Russia last week paid interest due on two sovereign bonds, easing doubts about its willingness and ability to honour external debt after harsh sanctions were imposed by Western nations following its invasion of Ukraine.
Last week, JPMorgan processed the payments as correspondent bank and handed them to Citigroup Inc, which as payment agent distributed the funds to bondholders.
While Russia's payments on sovereign bonds have been received, debt obligations from Russian companies linked to sanctioned billionaires have run into hurdles due to Western sanctions triggered by Moscow's invasion of Ukraine.
Russian steel producer Severstal, whose main shareholder, Alexey Mordashov, was sanctioned by the European Union on Feb 28, was having trouble paying the holders of its debt, a source close to the company said. Evraz, the Russian steelmaker whose biggest shareholder is sanctioned Russian Roman Abramovich, said yesterday a coupon payment due March 21 was settled with the paying agent after it was temporarily blocked by a Western correspondent bank.
The hurdles faced by these firms show how punishing Western sanctions imposed following Russia's invasion are having broad impact, as banks turn cautious to avoid violating the rules.
Citi and Severstal declined to comment on the information given to Reuters by the source.
Russia’s next test for its sovereign payments is a US$102 million payment on March 28 and after that on March 31 there is a US$447 million payment that must be made in dollars. Its biggest payment of the year –– and its first full repayment of principal, of US$2 billion – is due on April 4. – Reuters