Russia refuses to default, asks investors to look to Western financial agents According to Reuters

(Reuters) – Russia on Monday dismissed claims it was said to have defaulted on foreign debt for the first time in more than a century, requiring investors to go to Western financial agents to receive their numbers. money has been sent but not received by bondholders.

The White House said on Monday that Russia defaulted on international bonds for the first time since the Bolshevik revolution, as sweeping sanctions effectively decoupled the country from the global financial system.

Until last week, Russia continued to pay its Eurobonds in foreign currencies under the conditions of issuance but the transfer of the dollar and euro coupons was made in May, before the crucial waiver of the United States allowing such transactions to expire, did not reach investors.

Kremlin spokesman Dmitry Peskov told reporters on Monday: “The claim of default is completely unreasonable.

“It is not our business that Euroclear withholds this money and does not give it to the recipient. There is absolutely no basis to call such a situation a default.”

Euroclear did not immediately respond to a request for comment.

On Monday, the Finance Ministry said the ‘actions of foreign financial intermediaries are beyond the control of the Russian Finance Ministry’, requiring foreign bondholders to speak directly with those holding the funds. pay.

“The failure of investors to receive funds is not due to lack of payment but due to the actions of a third party and this is not directly stated as a default situation in the issuance document,” the ministry said. more.

As the US waiver expired and the European Union sanctioned the National Settlement Depository (NSD), the Russian version of western clearing houses Euroclear and Clearstream, last week, Moscow paid the next coupons due in rubles.

Last week, President Vladimir Putin ordered that debt obligations be considered fulfilled after a payment in rubles equivalent to the amount due is made. Bondholders need to open an account at a Russian bank to receive payments.

Moscow will not block the conversion of payments into foreign exchange and remittances abroad but investors need to say in writing that they have no complaints against Russia, the ministry said. The banks are yet to be announced.

‘Nuclear FINANCIAL COUNCIL’

The Group of Seven Great Western Powers banned transactions with Russia’s central bank and froze their assets held in their jurisdictions, worth some $300 billion, after Russia launched special military operation in Ukraine in February.

Some Western politicians have called for the seizure of frozen reserves to rebuild Ukraine – an idea that two senior Russian financial sources said they believe was behind the default announcement and that Moscow considers. is fake.

“By declaring default, they can claim that sanctions are effective. Economically, financial assets can be legally seized,” one of the two sources said. .

Peskov reiterated on Monday that the reserves had been frozen ‘illegally’ and that any attempt to use them would ‘lead to outright theft’.

Russian Deputy Finance Minister Alexei Moiseev said: “I believe that a financial nuclear bomb was used against us, no country in the history of mankind has been subjected to such sanctions pressure as Russia Currently”.