Business Maverick: Russia Faces Biggest Debt Test Yet After US Ban on Payments

Investors are supposed to receive about $100 million of interest on Russian foreign debt in their accounts by Friday, payments President Vladimir Putin’s government says it has already made. That’s unlikely to satisfy concerned bondholders who are keen to see the cash after the US Treasury closed a loophole that previously allowed American banks and individuals to accept such payments.

“We are in uncharted waters,” said Ehsan Khoman, head of emerging market research at MUFG Bank Ltd. in Dubai. “All eyes are now on May 27.” While a default would formally seal Russia’s financial isolation since the invasion of Ukraine, the around $20 billion it owes to foreign eurobond investors pales in comparison with the czarist-era debt, equivalent to hundreds of billions of dollars, repudiated by the Bolsheviks.The nation still wants to protect its reputation as a reliable borrower, a point reiterated by Finance Minister Anton Siluanov in a lecture at Finance University in Moscow.

If a payment isn’t completed, Russia then has a grace period of up to 30 days to find a solution, such as it did in early May, when itRussia’s finance minister said on Thursday there are plans to offer a new tool for bondholders that would allow them to receive principal and interest on Russia’s foreign debt. He’s also said it would make payments inAs Russia pushes to avoid default and get sanctions lifted, it’s using global concerns over food shortages as leverage.

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Business Maverick: Rare ship-to-ship transfers keep oil moving from Russia to ChinaWilling buyers of Russian crude are set to benefit from steep discounts relative to global benchmark prices as others avoid deals with Moscow due to its war in Ukraine. Cheap oil has made it attractive for top consumers such as China and India to keep importing from the OPEC+ producer, despite facing international condemnation and mounting logistical and financial hurdles. We should be benefiting from years of close ties with Moscow and membership of BRICS and jump on this
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Business Maverick: Russia faces biggest debt test yet after US ban on paymentsThe path for Russia to keep sidestepping its first foreign default in a century is turning more onerous as another coupon comes due on the warring nation’s debt. Investors are supposed to receive about $100 million of interest on Russian foreign debt in their accounts by Friday, payments President Vladimir Putin’s government says it has already made.
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