30 May 2022 13:11

System of ruble payments for Russian gas may be used in settlements with foreign Eurobond holders - Peskov

MOSCOW. May 30 (Interfax) - The system of payments for Russian natural gas in rubles has proven convenient to the parties, and this principle could also be used in settlements with foreign holders of Russian Eurobonds, Russian presidential press secretary Dmitry Peskov said.

"On the whole, for instance, the practice of payments for gas has proven convenient both to the sellers and the buyers under the present conditions. And why not use it in the opposite direction. But please address the Finance Ministry for details," Peskov told journalists on Monday, when commenting on Finance Minister Anton Siluanov's statement that, in settlements with Russian Eurobond holders, Russia would apply a mechanism analogous to that used in payments for Russian gas in rubles.

Siluanov told reporters last week that Russia planned to settle foreign debt in rubles after the U.S. Treasury Department has refused to extend the license to permit transactions to service Russian debt. He said, however that an option was being discussed where investors would be able to convert those rubles into other currencies, giving by way of illustration the arrangement by which foreign consumers pay for Russian gas via a special account, after which currency is sold on the Moscow Exchange and rubles are credited to Gazprom's accounts.

"Like this, only the other way round: when paying for gas in rubles, that is, they supply us with currency, here it is exchanged for rubles on instruction, and, thus settlements are carried out," he said.

Until now, Russia's Finance Ministry has managed to carry out all payments on foreign debt in the currencies of the bond issues, dollars and euros, despite the tough sanctions imposed against Russia. But after the expiration of the OFAC license Russia will technically not be able to make payments in dollars.

Payments on foreign currency sovereign Eurobonds were due on May 27 - coupon payments on Russia-2026 and Russia-2036 Eurobonds in dollars and euros. The MinFin said a week before that, when the OFAC license had not yet expired, but it had already emerged that it would not be renewed, that it had transferred funds to the payment agent for these issues, National Settlement Depository (NSD), and had honored its obligations to service the bonds in keeping with issue documentation. It is not known whether investors got their funds - Bloomberg said that bond holders had not received their money as of Friday evening.

The next payments on Russian Eurobonds are due on June 23-24. Siluanov said proposals regarding a new means of settlement with investors in the absence of the OFAC license would be ready by then.

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