Payments on Eurobonds issued since 2018 possible in rubles at Russian Central Bank’s exchange rate

Russia’s Finance Ministry has approved a temporary procedure for payments on public debt in foreign currency. Payments on Eurobonds issued since 2018 are possible in rubles at the exchange rate of the Russian Central Bank, Minister Anton Siluanov said, Report informs referring to Kommersant newspaper.

The minister is convinced that the freezing of foreign currency accounts of the Central Bank and the government within the Western sanctions “can be regarded as the desire of a number of foreign countries to organize an artificial default that has no real economic grounds.”

In order to fulfill commitments under Eurobonds, the Ministry of Finance will issue payment orders to agent banks in order to make payments in the foreign currency in terms specified in the issuance documentation. The actual possibility of making payments depends on sanctions restrictions on the ability of the government and the Central Bank to manage funds in their foreign currency accounts, the Ministry of Finance notes.

If a foreign correspondent bank fails to execute a payment order for Eurobonds, it is subject to withdrawal. In this case, the fulfillment of commitments is carried out in the following order: The Ministry of Finance makes payments on Eurobonds in rubles at the rate of the Central Bank on the date of payment established by the issue documentation; if the global Eurobond issue certificate is kept at the National Settlement Depository (NSD), the funds will be transferred to NSD for settlements with creditors; if the global Eurobond issue certificate is kept in a foreign depository, the funds will be transferred to NSD and credited to ordinary accounts of persons whose rights are recorded according to the depo account system in Russian depositories, and type "C" accounts of foreign credit institutions acting as paying agents.