RBC: Russia can service external debt without a US license
Russia is fulfilling its obligations under bonds even after the refusal of the US Treasury to renew a license under which holders of Russian government bonds expect payments from the Russian side, writes RBC. According to the compiled edition, the Board of the Russian Federation by the Republic of the paragraph on “reimbursement in another currency” from the documentation of future releases, assuming that the payment obligation is fulfilled, taking into account the possibility of processing the paid currency into dollars in the prescribed amount.
RBC also mentions the “alternative currency payment” contained in emissions since 2018 on paper. They allow making payments in rubles if any external restrictions (including the issuance of a patent) prevent payment in foreign currency.
Maximilian Hess, head of risk at consulting firm Hawthorn Advisors, pointed out that the Russian legal formula is widely used on the “reimbursement in foreign currency” provision to be able to challenge the absence of a default on external public debt. According to him, such a situation is possible if foreign holders of Russian licenses have the right to exchange rubles for dollars.
Earlier, Russian Finance Minister Anton Siluanov said that Russia supports servicing its public debt in rubles, and the decision of the US Treasury to refuse to renew the license “infringes, first of all, on the rights of foreign presence in Russian debt instruments and undermines confidence in Western financial infrastructure.”
The American side announced the refusal to renew the license under which Russia serviced the public debt on May 24. White House press secretary Karine Jean-Pierre noted that such a decision may appear due to default on debt obligations to bondholders.
More about the threat of default – in the material “Kommersant” “Default infection threat.”
More news in Telegram channel “Kommersant”.