22 Nov 2022 14:15

Russia's Finance Ministry transfers 2.3 bln rubles to NSD to pay coupons on Eurobonds Russia 2027 and Russia 2032

MOSCOW. Nov 22 (Interfax) - The Russian Finance Ministry has transferred 2.3 billion rubles or the equivalent of 37.2 million euros to the National Settlement Depository (NSD) in order to pay coupon yields on sovereign Eurobonds maturing in 2027 and 2032 in accordance with the Russian presidential decree dated June 22, 2022, the ministry said.

Acting as the paying agent, the NSD has received the funds, thereby the obligations to service the government securities of the Russian Federation have been completely fulfilled, according to the ministry.

The ministry at the end of June transferred rubles to the NSD in payment of coupons on the country's 2027, 2047 and 2028 Eurobonds as part of the new arrangement for servicing sovereign external debt, as approved by the presidential decree of June 22. The ministry in the autumn transferred rubles to the NSD in payment of coupons on the country's dollar-denominated 2023, 2043, 2029, 2035, 2030 and 2042 bonds.

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.

Foreign investors are "wary" of the possibility of getting payments in rubles on Russian sovereign Eurobonds given the risks of sanctions, Finance Minister Anton Siluanov said at the end of September.

"The position is very wary, since the Finance Ministry, like a number of our other agencies, has been hit by sanctions and relations with the Finance Ministry are a risk for foreign debt holders. Therefore, we're seeing a very, how shall I say, wary attitude toward cooperation on receiving coupon income on bonds," Siluanov said.