Russia has defaulted on its foreign debt, says S&P

Authored by edition.cnn.com and submitted by ajenn22

London (CNN Business) Russia has defaulted on its foreign debt because it offered bondholders payments in rubles, not dollars, credit ratings agency S&P has said.

Russia attempted to pay in rubles for two dollar-denominated bonds that matured on April 4, S&P said in a note on Friday. The agency said this amounted to a "selective default" because investors are unlikely to be able to convert the rubles into "dollars equivalent to the originally due amounts."

According to S&P, a selective default is declared when an entity has defaulted on a specific obligation but not its entire debt.

Moscow has a grace period of 30 days from April 4 to make the payments of capital and interest, but S&P said it does not expect it will convert them into dollars given Western sanctions that undermine its "willingness and technical abilities to honor the terms and conditions" of its obligations.

A full foreign currency default would be Russia's first in more than a century, when Bolshevik leader Vladimir Lenin repudiated bonds issued by the Tsarist government.

justabill71 on April 11st, 2022 at 15:42 UTC »

"No, we didn't. You did." - Putin, probably.

ableseacat14 on April 11st, 2022 at 15:13 UTC »

So what does this mean for Russia?

Fro_Yo_Joe on April 11st, 2022 at 15:03 UTC »

Moscow has a grace period of 30 days from April 4 to make the payments of capital and interest, but S&P said it does not expect it will convert them into dollars given Western sanctions that undermine its "willingness and technical abilities to honor the terms and conditions" of its obligations.

A full foreign currency default would be Russia's first in more than a century, when Bolshevik leader Vladimir Lenin repudiated bonds issued by the Tsarist government.

So they’re not in full default yet, but it’s very likely they will be when the 30 day timer is up.