- S&P Global Ratings on Thursday eased Russia's debt deep into the garbage dump, from 'CCC- / C' to 'CC / C'.
- Investors do not appear to have received a coupon payment in Eurobond in Russian dollars on Wednesday.
- That prompted S&P Global to reduce Russia's debt for the third time since it invaded Ukraine.
S&P Global Ratings downgraded Russia's debt to a landfill by the end of Thursday, saying it now sees the country as at greater risk of defaulting.
The institute has reduced Russia's independent credit rating to CC / C from CCC- / C in foreign and local currency, which brought two notes above default. That marks the third reduction in ratings since President Vladimir Putin's forces invaded Ukraine in late February.
"At the moment, we are considering that Russia's debt is at high risk of default," S&P Global said in a statement.
S&P Global has said it understands that investors did not receive a coupon payment in the Russian government's Eurobonds made in dollars when it arrived on Wednesday, due to technical problems related to the lawsuit. That caused the debt to be reduced, he said, while noting that there was a grace period of 30 days on bonds.
"While the Russian Treasury's public statements suggest that the government is currently trying to transfer payments to bondholders, we think that service payments on Russian Eurobonds that should in the next few weeks could face similar difficulties," the organization said.
Strong Western sanctions against Russia for its war with Ukraine cut off Russia's access to the global financial system and restricted access to its foreign reserves, threatening to undermine its economy.
This has made it difficult for the country to pay its debts, the organization said. At the same time, the Russian government's efforts to protect the ruble by compressing a large airline have contributed to its payment problems.
"All of this limits the ability of home and foreign bondholders who do not live to earn interest, capital payments, or both on time," S&P Global said.
Although there are exemptions from Russia's sanctions for making debt service payments, this will expire on May 25. That could add to some of the country's problems with debt-related payments, according to S&P Global.
Russia met its $ 117 million interest rate obligations on independent bonds worth $ 3 Wednesday, according to reports. Fitch Ratings had said the country could be wrong if it tried to pay in rubles instead of dollars.
Moody's rating agencies and Fitch Ratings have also reduced Russia's debt levels, and Fitch has warned Russia's debt crisis is "imminent".
Russian companies and governments owe nearly $ 150 billion to overseas investors, many of which are found in foreign currencies such as dollars and euros.
Russia's last debt crisis in 1998 rocked Wall Street, and if it failed to pay interest on foreign currency, it would be the first such failure since the 1918 Bolshevik revolution.
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