Russia skates into historic debt default

Russia skates into historic debt default

June 28, 2022: -On Sunday, Russia joined its starting major foreign debt default for over a century after a grace time on two international bond payments lapsed.

On Sunday, Interest payments counting $100 million were dedicated on May 27 and were subject to a grace period that expired. A few media outlets have reported that bondholders who have not received the payments after trying to pay in its ruble currency were blocked by international sanctions.

The Kremlin has denied the claim that Russia is in default, with spokesperson Dmitry Peskov telling a press call that Russia made the bond payments due in May. Still, Euroclear has stopped them due to Western sanctions, rendering the non-delivery of payments “no problem.”

Sweeping sanctions imposed by Western powers in response to Russia’s unprovoked invasion of Ukraine and countermeasures from Moscow have effectively ostracized the country from the world’s financial system. Still, the Kremlin is driving to find ways to get payments to bondholders on multiple occasions.

Attempts to circumvent sanctions are taking a further blow in late May, however, when the U.S. Treasury Department permitted a pivotal exemption to expire. The waiver had earlier permitted Russia’s central bank to process payments to bondholders in dollars through the U.S. and international banks.

Russian Finance Minister Anton Siluanov indicated that Russia might have found one more means of payment this month. Moscow wired the $100 million in rubles to its domestic settlement house. Still, the two bonds in question are not subject to a ruble clause that would allow payment in the domestic currency to convert overseas.

On Monday, Reuters said early, Indian two sources that some Taiwanese holders of Russian Eurobonds have not received the interest payments due on May 27, indicating that Russia may be entering its first foreign debt default from 1918, despite having much cash and willingness to pay.

Reportedly, Siluanov told Russian state-owned news agency RIA Novosti that the blockage of payments does not form a simple default, which usually arrives from reluctance or inability to pay, and reached the situation as a “farce.”

About Us

We provide the insights on leaders who are responsible for taking their organization to new heights, all the while bringing together a group of talented individuals.

Recent Posts | Make Profit Not Waste | Stephen Pratt

Supply chain leaders, including VPs, often find themselves making bets with unknown financial consequences. Having started with largely infeasible plans generated by deterministic “one-number” planning systems, compounded by unexpected supply or demand disruptions, they are forced into last-minute adjustments to meet operational and financial goals.

Intelichain | Revolutionary Supply Chain Planning Solutions | Roei Aviram

Unsurprisingly, today’s supply chain faces numerous issues, including sustainability, technology, global economic and political instability, talent management, and supply chain resilience. Advanced forecasting algorithms and predictive analytics are used in supply chain management to help organizations of all sizes make better decisions by providing insights into what’s going on in their business at any given moment and predicting future trends.

GAINS | Empowering Companies to Make the Right Decision | Bill Benton

Ensuring the right products are in the right place and at the right time is critical for companies also dealing with supply chain constraints and a high degree of variability. Uncertainty has become the name of the game and the only way to effectively optimize inventory through continuous, data-driven assessments, planning, and decision-making.

Extensiv | Creating the Future of Omnichannel Fulfillment | Sheridan Richey

Food Huggers, a consumer brand that designs products to reduce waste at home, may be in an enviable position now but before they found Extensiv Order Manager, managing booming orders and staying on top of inventory was a huge operational challenge. The business has inventory spread across multiple geographically distributed warehouses, with orders received via multiple sales channels, including Shopify storefronts and Amazon.

Russia skates into historic debt default