Kremlin Says Russia Didn’t Default on Debt After Missed Payments

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The Kremlin pushed back on claims that Russia defaulted on its foreign-currency debts on Monday, placing the country at odds with creditors. "Claims that Russia is in debt default are wrong. A foreign-currency payment was made back in May, and the fact that funds were not transmitted to recipients is not our problem,” presidential spokesman Dmitry Peskov told reporters. Russia missed payments on two foreign-currency bonds as of late Sunday, the day that marked the expiration of a 30-day grace period, according to bondholders. The country was due to pay the equivalent of $100 million in dollars and euros. The default has been long expected by investors after punishing Western sanctions against Russia. Moscow has accused the West of manufacturing an artificial default, and has gone to great lengths in recent months to route money in roundabout ways to get the required payments into the hands of bondholders. Investors and lawyers say the country has defaulted because the funds didn’t reach bondholders. Russia is likely to argue that it fulfilled its obligations because it sent funds to clearinghouse Euroclear, though those weren’t forwarded on to investors because of sanctions, according to a bondholder. Lawyers say the bond documents are unclear over whether payments that reached the clearinghouse, but not the bondholder account, would constitute a formal default. A Euroclear spokesman declined to comment. Read more. (Subscription required.)
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