NLMK looking for way to get Eurobond coupon payments to Russian investors

MOSCOW. March 23 (Interfax) - Novolipetsk Steel (NLMK) said that it has successfully paid a coupon on its Eurobonds, but noted that bondholders from Russia are not receiving the payments because international depositories are no longer settling transactions with Russia's National Settlement Depository (NSD).

The scheduled coupon payment for Eurobonds that mature in 2024 was successfully processed on March 21, 2022, so the company has duly performed its obligations in accordance with their terms, the Russian steelmaker said.

NLMK also said it has received confirmation that foreign bondholders have started to receive their coupon payments.

However, the coupon payments did not reach bondholders based in Russia because international central securities depositories Euroclear and Clearstream are no longer settling transactions with Russia's National Settlement Depository, NLMK said.

"We currently see no legal grounds prohibiting Euroclear and Clearstream to process payments to Russian residents," the company added.

NLMK said it is currently considering alternative ways to deliver the coupon payments to bondholders based in Russia.

The problem mentioned by NLMK was recently raised by Russian Union of Industrialists and Entrepreneurs (RSPP) head Alexander Shokhin in a letter to the Central Bank. It is due to the fact that most Russian holders of Eurobonds use the NSD, to which Euroclear is supposed to transfer money from issuers as to a lower-level depository. When money is transferred through Euroclear for coupon payments on Eurobonds or their redemption, funds are reaching foreign bondholders but not Russian ones, Shokhin said.