11 Mar 2022 19:01

RSPP requests that Central Bank resolve issue with Eurobond payments to Russian investors not clearing Euroclear

MOSCOW. March 11 (Interfax) - The Russian Union of Industrialists and Entrepreneurs (RSPP) has requested that the Central Bank of Russia (CBR) resolve the issue concerning payments on Eurobonds to Russian investors, particularly when issuers transfer funds from Russia via Euroclear, and the funds do not reach local recipients.

RSPP head Alexander Shokhin wrote a note to Central Bank Governor Elvira Nabiullina on March 10, outlining the matter and requesting that the CBR "implement a mechanism" in order to remedy the situation.

The issue stems from the fact that most Russian Eurobond holders use the National Settlement Depository (NSD) as their downstream depository, to which Euroclear must transfer money from issuers as the downstream depository. However, Euroclear has halted these transfers, resulting in funds not reaching the Russian bondholders, according to Shokhin's note. The funds reach foreign holders and do not reach Russian ones when the funds are transferred via Euroclear as part of the payment of coupons on Eurobonds or their redemption, according to the note.

Several large Russian borrowers have rendered payments on Eurobonds all at once over the past few days, specifically Rosneft , Gazprom and Russian Railways (RZD).