UPDATE: Minister: Russia’s payment of Eurobond coupons in rubles not default

(Rewrites story)

MOSCOW, Jun 23 (PRIME) -- Russia’s suspension of paying coupons on Eurobonds in foreign currencies and the shift to the ruble scheme is not a default, but force majeure, Finance Minister Anton Siluanov told reporters on Thursday.

“No, it does not mean (a default). Russia has not refused to fulfil its obligations on government bonds and makes every effort to pay the money to the investors as a responsible debtor,” he said.

“The payments will be processed, but the problem is that they cannot be received by our investors. Why not? The first reason is that the foreign infrastructure… is prohibited from processing any transactions linked to Russia. And the second one is that foreign investors are directly prohibited from receiving payments from us,” he also said.

Siluanov also said that in the force majeure situation Russia has chosen to pay using the ruble and the Russian infrastructure as it cannot use any other means.

Russia is also unable to perform payments in reserve currencies such as euros, British pounds or Swiss francs as the issuers of the currencies also included its National Settlement Depository into the sanctions lists, he added.

Foreign investors will be able to convert and withdraw their money without limits if their governments allow them to, Siluanov said.

He added that there is no use for foreign investors to go to the court to recognize Russia’s default on external obligations as it is ready to service its foreign debt.

The Finance Ministry said in a statement that it has paid a total of 12.51 billion rubles worth of coupons on two Eurobond issues maturing in 2027 and 2047. The coupons were sent in rubles to payment agent National Settlement Depository.

(53.2788 rubles – U.S. $1)

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