31 Mar 2022 19:38

Russian Railways requests license from UK to make coupon payments on Eurobonds

MOSCOW. March 31 (Interfax) - Russian Railways (RZD) has requested a license from the UK to make coupon payments on its Eurobonds, according to a statement from the company on Thursday.

On March 23, the company transferred a payment of interest on the loan agreement to RZD Capital, which is then used to make coupon payments on Eurobonds in pounds sterling (ISIN XS0609017917), to the RZD Capital (Ireland) account opened at Deutsche Bank (acting as the account bank and payment agent) in London.

The funds were received, meaning that RZD obligations were fulfilled on time, but on March 25, Deutsche Bank informed Russian Railways that the received funds were blocked on the accounts of RZD Capital, which makes it impossible to transfer them to bondholders. As of the date of publication of reporting [March 31], these payments are considered frozen assets and blocked on the account of the agent bank. Holders of the respective Eurobonds, including UK residents, have not received any funds, the statement said.

However, Credit Suisse's correspondent bank also continues checking on compliance with the internal requirements and current sanctions restrictions with respect to the transfer of funds sent by Russian Railways on March 22 make coupon payments on Eurobonds in Swiss francs (ISIN CH0522690715) as of the date of the report [March 31]. "So far there is no information about the status of these payments. On the part of Russian Railways, all the necessary substantiating information has been submitted to the correspondent bank," the monopoly told Interfax.

"In order to unblock the funds and accelerate the flow of payments through the chain of correspondent banks, the company has sent a request to the UK Financial Sanctions Implementation Authority (OFSI) for a license to make the above payments. The company is taking all available actions to fulfill its obligations to the holders of securities," RZD said in the statement.