Severstal unable to make coupon payment on another issue of dollar-denominated Eurobonds

MOSCOW. April 22 (Interfax) - Severstal , which failed to make a payment on dollar-denominated Eurobonds maturing in 2024 in March, has been unable to make a coupon payment on another issue maturing in 2022.

Severstal is technically unable to pay the remaining interest on the loan associated with 2024 Eurobonds, which matured on March 16, and the interest on the loan associated with 2022 Eurobonds, which matured on April 17, due to a lack of regulatory approvals that are still pending, the company said in a statement.

The company notes that it still intends to fulfill its Eurobond obligations and has sufficient funds for this purpose.

In March, Severstal, whose principal owner Alexey Mordashov has been under EU sanctions since late February, reported that it was unable to make a payment on 2024 Eurobonds, which ended up frozen. The company tried to transfer an amount equal to 1% of the coupon (the total expected payment of $12.6 million) to investors as part of the trial payment; had it been approved, investors would have been able to receive the rest of the amount, Severstal explained. However, this payment was blocked by a foreign agent bank.

The company applied to OFAC (Office of Foreign Assets Control, the sanctions enforcement arm of the U.S. Treasury Department), the UK's Office of Financial Sanctions Implementation (OFSI), as well as the competent sanctions authorities in Luxembourg and Ireland for licenses that would allow it to make payments on the Eurobonds.