Russia paid coupons on Eurobonds for $117.2M

Russia’s Finance Ministry has fulfilled the order on payment for coupon income payments for $117.2 million on two issues of Russian Eurobonds dated March 14, Report informs referring to the Kommersant newspaper.

The currency in which the payment was made has not yet been reported. Earlier, Finance Minister Anton Siluanov said that Russia would try to pay off its obligations in dollars and had enough foreign currency for this. If the US doesn’t make the payment, Russia will pay in rubles. According to Fitch, this would mean a sovereign default.

Problems with servicing the public debt in currency arose after the Western countries froze the gold and foreign exchange reserves of the Russian Federation. According to the Ministry of Finance, about half of all Russian reserves - $300 billion - were subject to restrictions.

Because of this, the Ministry of Finance warned that Russia would pay its debts to unfriendly countries in rubles at the rate of the Central Bank of the Russian Federation. Fitch Ratings said that Russia's payments in rubles would be considered a default. In this case, according to Reuters, this might be the first major default on foreign debt since 1917, when the Bolsheviks refused to pay the royal debts.

On March 16, the Ministry of Finance promised to repay liabilities in foreign currency. The ministry sent an order to Citibank to pay coupons on Eurobonds. The payment was supposed to be implemented in case of unlocking Russian assets under the license granted by the US Treasury, which allows, at least until May 25, investors to receive debt payments on Russia's sovereign Eurobonds.