Russia avoids defaulting on debt as creditors receive interest payments
Russia has avoided defaulting on its debt, as some creditors received their dollar bond coupon payments on Thursday, the Wall Street Journal reported.
Why it matters: Russia owes a series of interest payments to bondholders in the months ahead and a default on its debt could have the potential to ripple outward.
Driving the news: Russia's Finance Ministry announced Wednesday that the required interest payments had been made, though one of Russia's European creditors said the payment hadn't been received.
- Russia’s finance minister, Anton Siluanov, had stated earlier that U.S. sanctions could prevent the payments from going through.
The big picture: The payments — amounting to $117 million on two dollar-denominated sovereign bonds — were due Wednesday and arrived a day late, albeit within the 30-day grace period, Reuters reported.
- The funds were transferred to JPMorgan Chase, which then forwarded the payments to Citibank, which is "responsible for distributing the interest to individual financial institutions," per the Washington Post.
- The Treasury Department has said that the U.S. sanctions on Russia don't prohibit the making of debt payments and released guidance earlier this month allowing U.S. investors to receive interest payments on Russian debt through May 25.
But, but, but: Thursday's payments do not totally absolve the possibility of a future default.
- Russia is required to make interest payments on other bonds before the end of the month, per the Post.