Teetering on default, Russia misses $1.9 million payment, committee determines

Teetering on default, Russia misses $1.9 million payment, committee determines

Source: Reuters



Russia's failure to pay $1.9 million in accrued interest on a dollar bond will trigger payouts potentially worth billions of dollars, a panel of investors determined on Wednesday, as the country teeters on its first major external debt default in over a century.

Sanctions imposed by western countries and their allies on Russia following its invasion of Ukraine on February 24, as well as counter measures by Moscow, have all but excluded the country from the global financial system. The lapse last month of a key U.S. license allowing Russia to make payments put the prospect of the country defaulting back into focus.

A Credit Derivatives Determinations Committee (CDDC) overseeing Europe, whose members are banks and asset managers, said on its website on Wednesday that it voted 'yes' to a question on whether a "failure to pay credit event" occurred with respect to Russia.

Citibank was the sole 'no' vote, while 12 other members voted 'yes'.

Russia's international 2022 bond matured on April 4 and payment of principal and interest due at maturity was not made until May 2. During that period, Russia was obligated to continue to pay interest which a holder calculated at $1.9 million.

The CDDC was then asked to