Borrowers advised to remit separate payments to Russian, foreign Eurobond holders, redeem in rubles

MOSCOW. April 12 (Interfax) - The subcommittee of the Russian government commission on oversight of foreign investment has recommended that borrowers remit separate payments respectively to Russian Eurobond holders and to foreign Eurobond holders, the Finance Ministry said following a meeting of the subcommittee.

"Owing to the current ongoing violations of the rights of Russian holders of Eurobonds by the international settlement and clearing system, payments on Eurobonds are received only by those bondholders whose rights are recorded in a foreign accounting system. The funds do not reach Russian holders of Eurobonds," according to the ministry's statement.

Overcoming the current circumstances is possible if applicants comply with the recommendations developed by the subcommittee, according to the statement. Specifically, it is recommended to remit separate payments, which would be rendered through a foreign paying agent as previously for bondholders whose rights are registered in a foreign accounting system; and separately through a Russian paying agent as prescribed by presidential decree, without using type "C" accounts, for bondholders whose rights are registered in the Russian accounting system.

The subcommittee has also recommended that bonds be redeemed for rubles via the Russian market infrastructure as an alternative option for borrowers to ensure the interests of Russian investors.