Russia keeping Eurobond payment commitments, says finance ministry

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The Russian finance ministry said on Tuesday it has fully paid a coupon on the country’s Eurobond due in 2035, its third payout since unprecedented Western sanctions called Moscow’s ability to service foreign currency debt into question.

The ministry said it had channelled $102m for the coupon payout on the Eurobond to Russia’s National Settlement Depository .

“The Russian finance ministry has fully executed its obligations to service sovereign securities of the Russian Federation in accordance with the Eurobond prospectus,” the ministry said, without giving details on whether the payment had been sent to Euroclear or processed further to foreign Eurobond holders.

However, a source familiar with the situation said the transaction was processed by correspondent bank JPMorgan Chase. According to the Eurobond prospectus, settlement with investors occurs through the NSD and Euroclear, and “if, for reasons beyond its control, the Russian Federation is unable to make payments in US dollars”, settlement may be in euros, pound sterling, Swiss francs or Russian roubles.In mid-March, Russia paid $117m in interest due on two sovereign Eurobonds and last week another $66m coupon due on another issue. Excluding this Monday’s coupon, Russia has another $4.

Russia’s next payment is on March 31 when a $447m payment falls due. Its biggest payment of the year — and its first full repayment of principal, of $2bn — is due on April 4.

 

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