Moody’s considers Russia to be in “default”
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The April 4 payment of bonds in rubles instead of dollars is seen as a default, as it “changes the payment terms of the original contracts”, the agency says.

Moody’s believes that Russia defaulted as it paid off two sovereign bonds in rubles instead of dollars on April 4th, which “changes the payment terms of the original contracts and therefore , can be considered a default”.

“Bond contracts are not payable in any currency other than dollars,” the rating agency said in a statement issued this Thursday, quoted by Reuters. Moody’s indicates that Moscow will now have until May 4, which is the end of the grace period, to resolve the situation.

The agency clarified in its note that, although some Russian bonds issued after 2018 allow payments in rubles under certain conditions, this does not apply to bonds issued before that year, such as bonds paid on 4 Aprl, with maturity dates in 2022 and 2042. “Moody’s opinion is that investors have not obtained the contractual promise in foreign currency on the payment due date”.

The Russian Finance Ministry did not respond to a Reuters request for comment. However, the holder of the portfolio, Anton Siluanov, had advanced earlier this month that, if Russia is forced to go into “default” due to sanctions imposed by the West, it would take legal action.

If Moscow defaults, it will be the country’s first default after the Bolshevik revolution of 1917.

Source: with agencies

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