Although Russia is still a long way off from defaulting, the problems are now also spreading to issuers with Russian roots.

According to the Russian Ministry of Finance on Tuesday, another interest payment for a foreign currency bond has been transferred to the creditors.

The interest due, totaling $65.63 million, is said to have been paid in full for the government bond that runs until 2029.

The transfer was processed by the US bank JP Morgan Chase, the Reuters news agency quoted a financial market participant as saying.

Markus Fruehauf

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Philip Pickert

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Last week, Russia paid interest totaling $117 million through the American institute.

These had to be made in American currency, while the interest payment now due could also have been made in rubles under certain conditions due to a loan clause.

Russian Finance Minister Anton Siluanov has threatened that payments for bonds will be made in rubles if Western sanctions prevent Russia from accessing dollars.

The rating agencies have long classified Russia as junk because they consider a technical default to be likely due to the sanctions.

According to Siluanov, the Russian central bank can no longer access foreign currency reserves of 300 billion dollars.

Overall, the country has gold and currency reserves of 640 billion dollars.

April 4 repayment of $2 billion

The nail-biter is likely to continue in the coming weeks: on April 4, Russia will have to repay a bond worth 2 billion dollars.

This payment must also be made in dollars.

If this is not the case and Russia transfers only rubles, this constitutes a default according to the assessment of the leading rating agencies S&P Global, Moody's and Fitch. There is then a period of 30 days after the first payment date in which the transfer can be made in dollars and so that the payment default can be averted.

EU Commission prohibits ratings

But then the three major rating agencies would no longer be able to rate Russia and Russian issuers.

On Tuesday, S&P announced it would withdraw all outstanding Russian ratings by April 15.

This will implement the ban declared by the EU in mid-March.

On March 9, S&P announced that it would be closing its business in Russia.

Moody's had already announced this on March 5th.

Last week, the EU Commission prohibited the rating agencies from rating bonds issued by the Russian state and local companies.

“These sanctions will help to further increase the economic pressure on the Kremlin,” the EU Commission justified its decision.

This step had been agreed with international partners, especially with the USA.

Russian foreign currency bonds with a total volume of around 40 billion dollars are currently in circulation.

Around half of these are held by foreign investors.

However, the International Monetary Fund (IMF) considers serious consequences for the global financial system in the event of a state bankruptcy in Russia to be unlikely.

Evraz payment blocked

The sanctions are now increasingly putting Russian companies under pressure.

The Russian steel group Evraz, which is listed on the London Stock Exchange, has announced that an interest payment of almost 19 million dollars has been blocked and that it could thus slip into default.

This could be an indirect consequence of British sanctions affecting Evraz's main shareholder, Roman Abramovich.

According to the steel company, it wanted to make an interest payment of $18.9 million on its $700 million bond to a correspondent bank in New York, the local branch of the French Société Générale, which was then to be passed on.

However, Société Générale stopped the payment.

The major upheavals since the beginning of Russia's Ukraine war and the sanctions are depressing the values ​​of Russian stocks and bonds.

The Evraz bond is currently trading at just 60 percent of face value.

The Evraz share has lost a good 70 percent of its value on the London Stock Exchange in the past four weeks.