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