Russian investors seek decision on credit event after late bond payment

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LONDON, May 26 (Reuters)OConversely, holders of a Russian sovereign bond that matured last month are demanding a ruling on whether $1.9 million in arrears constituted a “credit event” that could possibly allow them to collect payment on default insurance.

The EMEA Credit Derivatives Determination Committee (CDDC) said on his site on Thursday this hthe elders of the bond 2022 ha dsent a notice through Euroclear, one of the world’s largest settlement systems for stock and bond transactions, “demanding payment of approximately $1.9 million.”

They asked if a payment credit event” occurred on unpaid increased interest.

“The bonds matured on April 4, 2022 but payment of principal and interest due at maturity was not made until May 2,” said the query added.

The notice via Euroclear was sent in mid-May.

Russia had paid nearly $650 million, including the maturing bond, during a grace period, justifying possible interest arrears.

But default on other debt now looks inevitable, after the US Treasury this week opted not to extend a license that had allowed creditors to receive payments from Russia despite financial sanctions.

There is currently $2.54 billion in net notional credit default swaps (CDS) outstanding in relation to Russia, including $1.68 billion on the country itself RUGV5YUSAC=MG and the rest on the CDX.EM index, according to JPMorgan’s calculations.

(Reporting by Jorgelina do Rosario and Karin Strohecker; editing by Dhara Ranasinghe)

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Elaine R. Knight