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Friday, March 18, 2022

Russia says the dollars for bond payments are with Citigroup — but investors are left waiting

  • Russia has said it has sent $ 117 million to meet its coupon payments on its bonds, saying the money belonged to Citigroup.
  • However, the money was supposed to go to other bond owners from Friday morning.



However, there was an uproar as some detainees reported that they had not yet received their money.

Another bond owner told Insider that they had not received any money since 8 am ET. They speculate that there are additional documents holding the program.

Bloomberg reported that five investors had not received anything Friday morning. However, Reuters reported that some debtors received their payments.

Despite the delays, signs of progress have prompted investors to drop their bet that Russia will fail to repay its foreign currency debt for the first time since the Bolshevik revolution in 1918.

The prices of the two Russian bonds in question, which matured in 2023 and 2043, rose on Friday after rising on Thursday. They are still trading at about 50% of the face value, however, indicating risks the dollar payments may not make, or future payments may be in jeopardy.

Speculation grew earlier this week that Russia was trying to fail after the government said it might be forced to pay in rubles for Western sanctions. The US and its allies have joined forces to pull the country out of the global financial system following its invasion of Ukraine.

Despite its warning, Russia sent a dollar payment to JPMorgan, who has foreign bank ties, according to a source familiar with the matter.

JPMorgan considered a $ 117 million transfer and sent money to Citi, a payment agent responsible for obtaining funds from investors, the man said.

Citigroup and JPMorgan declined to comment on the situation.

On Thursday, the S&P rating agency lowered Russia's debt rating to "deep" debris despite government guarantees that it had paid.

S&P analysts say the "technical difficulties" caused by Western sanctions have made it difficult for Russia to meet bond payments. He said such problems could continue.

"We think the repayment of the Russian Eurobonds due in the next few weeks may face similar difficulties," they said. Eurobond is another name for a foreign currency bond.

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