[Reuters]-Russian Ministry of Finance announced on April 29 that it will buy back $ 2 billion of Eurobonds, which will be redeemed on April 4, in rubles instead of dollars.
Russia describes the sanctions introduced by Western countries as “economic warfare.” So far, it has asked unfriendly countries to pay in rubles when purchasing natural gas, and it seems that countermeasures have been strengthened.
The Ministry of Finance has stated that bondholders must indicate their intention to sell to the Japan Securities Depository Center, Russia (NSD) by 1400 GMT on the 30th (11:00 pm Japan time). He said he would buy it back at face value, but didn’t say how much of the $ 2 billion he would buy back, or what steps bondholders should take to reject the Treasury’s proposal.
According to JP Morgan, the bond has a 30-day grace period and there is no provision for payment in alternative currencies.
It is unclear at this point if bondholders will be forced to receive the ruble, but if the terms of the bond are violated, Russia may be determined to have defaulted.
Tim Ash of Blue Bay Asset Management said it was part of a move by the Central Bank of Russia and the Treasury to “avoid defaults and stabilize markets and rubles.”
The Russian Ministry of Finance announced on this day that it has fully paid interest on Eurobonds redeemed in 2035. This will be the third interest payment since the sanctions of Western countries raised concerns about default of foreign currency-denominated debt.
