Russian payment on Eurobond coupons fulfilled - Finance Ministry

MOSCOW. March 17 (Interfax) - The payment order to the foreign correspondent bank for the payment of coupons on the sovereign Eurobonds of the Russian Federation has been executed, the Russian Finance Ministry said in a statement.

"The Russian Finance Ministry informs that the payment order for the coupon yield on the bonds of external bonded loans of the Russian Federation, maturing in 2023 and 2043, in the total amount of $117.2 million, due on March 15, 2022, sent to the foreign correspondent bank, on March 14, 2022, has been executed," the ministry said in a statement.

The Finance Ministry will inform additionally about the results of crediting the funds in order to pay the agent for the Eurobonds (Citibank, N.A., London Branch), according to the statement.

Thus, it can be concluded from the statement that that Russia might have paid the bond coupons in the currency in which they were issued, in other words dollars.

"The payment was made in foreign currency. There is no problem with servicing the public debt," the Finance Ministry said in a commentary posted on Telegram to accompany the press release.

The Finance Ministry said on Monday that it sent an order for the payment of coupons on sovereign Eurobonds. Russia has prepared instructions to pay the sovereign Eurobond coupon due on March 16 and will do so in rubles if foreign banks are unable to effect the payment due to Russia's international reserves being frozen, Finance Minister Anton Siluanov said. International rating agencies could view a payment in rubles on dollar-denominated bonds as default. Fitch said as much on Wednesday.

Bloomberg reported on Wednesday evening, quoting U.S. Treasury Department guidelines, that the current sanctions do not bar Russia from servicing sovereign debt in dollars, at least not until the relevant license lapses at the end of May.

The agency said some bond-market participants had been questioning whether Russia is legally able to make interest and principal payments on its dollar bonds to overseas investors, in light of the U.S. restrictions on Russian government entities, including the Finance Ministry and Central Bank. The Treasury's guidance said that U.S. persons were authorized "to receive interest, dividend, or maturity payments on debt or equity of the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation through 12:01 a.m. eastern daylight time on May 25, 2022," Bloomberg said