Russia's Finance Ministry remits payment on 2028 Eurobonds using new settlement arrangement in rubles
MOSCOW. June 24 (Interfax) - National Settlement Depository (NSD), the paying agent for Russian sovereign Eurobonds, has received 8.5 billion rubles or $159.4 million equivalent in order payment of coupon interest on the country's 2028 Eurobonds, the Finance Ministry said.
The ministry said it had honored obligations to service the sovereign bonds in full.
The ministry said on June 23 that it had has transferred rubles to the NSD in payment of coupons on the country's 2027 and 2047 Eurobonds as part of the new arrangement for servicing sovereign external debt, as approved by a presidential decree of June 22.
The ministry said it was switching to a new procedure for payments on Eurobonds due to the "non-fulfilment by foreign counterparties of their commitments to conduct payments for the settlement of Russian public debt."
The ministry split Eurobond holders into three groups depending on the infrastructure that records their ownership rights.
Funds will be transferred to the first group of Eurobond holders, whose ownership is recorded by NSD or its Russian sub-depositories as usual, without further action.
Funds will be transferred to the second group of Eurobond holders, whose ownership is recorded by Russian depositories with the participation of foreign ones, by the NSD via such Russian depositories, bypassing foreign intermediaries.
Funds leftover after transfers in favor of first- and second-group bondholders will be credited by NSD to a special ruble Type "I" account, from which payments will be made to third-group holders who are unable to transfer funds within the framework of standard procedures due to non-fulfillment by foreign settlement and clearing organizations of their obligations. Funds on this account will be indexed at the current market exchange rate of the nominal currency until actual settlements with the owners are made.
The central depositary does not bear costs related to the indexation of funds credited to Type "I" accounts.