Moody's reported that Russia defaulted on foreign debt obligations. This is stated in the message on the website of the international rating agency.
On June 27, holders of Russian sovereign debt did not receive coupon payments on $100 million Eurobond issues by the time the 30-day grace period expired, which, according to our definition, constitutes a default, the report says.
Last month, the US did not renew the general license that allowed Russia to make payments to service its foreign debt. Thus, in order to repay the debt, Russia last week fulfilled its obligations under Eurobonds in rubles for the first time using a new mechanism that allows such payments to be made.
As Finance Minister Anton Siluanov noted on Thursday, this does not mean a default on the external debt - creditors have no reason to believe that Moscow is fulfilling its obligations improperly, since Russia, under force majeure conditions, is doing everything so that creditors receive their funds. According to Siluanov, the United States and the European Union are creating artificial barriers to servicing Russia's external debt in order to put the 'default' label on it.
In turn, Moody's does not rule out further defaults on future coupon payments. By a decree of the President of Russia dated June 22, a procedure was introduced for paying external debt in rubles. We were of the opinion that we would consider payments in rubles on bonds that do not allow such a denomination in accordance with the contractual terms as a default, the agency noted.
They added that Eurobonds issued by Russia after 2018 allow redemption in rubles under certain conditions. However, Eurobonds issued prior to 2018 either do not contain this provision or only allow redemption in a currency such as the dollar, euro, pound sterling or Swiss franc.