Free Republic

Russia's failure to pay $1.9 million in accrued interest on a dollar bond will trigger payouts potentially worth billions of dollars, a panel of investors determined on Wednesday, as the country teeters on its first major external debt default in over a century.

Russia previously insisted on completing payments in rubles. Russia appeared to narrowly avoid default on Friday as it paid off a number of overdue international debts in dollars, reversing its recent policy requiring transactions occur in rubles. The finance ministry said it paid $564.8 million on a 2022 Eurobond and $84.4 million on a 2042 bond in dollars, as specified on the bonds, Reuters reported.

The United States stopped the Russian government on Monday from paying holders of its sovereign debt more than $600 million from reserves held at U.S. banks, in a move meant to ratchet up pressure on Moscow and eat into its holdings of dollars. Under sanctions put in place after Russia invaded Ukraine on Feb. 24, foreign currency reserves held by the Russian central bank at U.S. financial institutions were frozen. But the Treasury Department had been allowing the Russian government to use those funds to make coupon payments on dollar-denominated sovereign debt on a case-by-case basis. On Monday, as the...

Russia will soon be unable to pay its debts, according to a leading credit ratings agency. Fitch Ratings downgraded its view of the country's government debt, warning a default is "imminent". The move comes amid increasing international sanctions against Russia following its invasion of Ukraine. A credit rating is intended to help investors understand the level of risk they face in buying a country's debt - or bonds. A low rating means the chances of not getting repaid is considered to be high - and so an investor will charge more to lend to that country. This week, Moscow itself...

Russia’s currency sank to a record low Monday as traders struggled to get access to the ruble. The ruble fell to 137 to a dollar, a decline of more than 10% from Friday’s close, as traders say that the ability to buy and sell the Russian currency has become more limited as fewer banks want to settle transactions against it in the offshore market.

Russia said on Sunday that sovereign bond payments will depend on sanctions imposed by the West over the invasion of Ukraine, raising the spectre of its first major default on foreign bonds since the years following the 1917 Bolshevik revolution.