The Russian finance ministry on Thursday said it had fulfilled its obligations on two issues of dollar-denominated Eurobonds “in full” by sending 12.51 billion roubles ($234.5 million) in coupon payments to the National Settlement Depository (NSD).
The ministry said the payments were on Eurobonds maturing in 2027 and 2047.
“Thus, obligations on servicing the state securities of the Russian Federation were fulfilled by the finance ministry in full,” the ministry said in a statement.
Finance Minister Anton Siluanov said in a statement that Russia not making payments in the currency of issue did not amount to a default on its foreign debt.
President Vladimir Putin signed a decree on Wednesday to establish temporary procedures aimed at fulfilling Russia’s foreign debt obligations as the country teeters on the brink of default.
The ministry said it was transitioning to the procedure established by Putin’s decree, whereby funds will be disbursed in roubles to the NSD before being distributed to three groups of bondholders in stages, depending on the amount of sanctions red tape applicable to each investor.
Eurobond holders whose ownership rights are contained within Russia’s financial system will be paid in roubles, while the holdings of investors to whom funds cannot be transferred due to sanctions imposed on Moscow will be credited to a special rouble account at the NSD.
“In order to ensure strict compliance with Eurobond obligations undertaken by the Russian Federation, funds from this account will be indexed at the current market exchange rate of the nominal currency until the moment of actual settlements with holders,” the ministry said.
Investors will need to open a rouble account to receive those funds, the ministry said.
“Holders of Eurobonds of each of these three groups will have the right to dispose of the rouble funds received at their discretion, including converting them into the nominated foreign currency, or into another currency,” the ministry said.
“Permission to transfer the received roubles or the obtained foreign currency abroad will be granted in due course.”
Asked whether the new scheme would allow Russia to make the case that no default had occurred, Siluanov said: “Everyone will still say what they want to say.”