4 Apr 2023 18:28

MinFin transfers 6.6 bln rubles to NSD to pay coupon on Russia-2042 Eurobonds

MOSCOW. April 4 (Interfax) - The Russian Finance Ministry has, in accordance with a presidential decree of June 22, transferred 6.6 billion rubles or the equivalent of $84.4 million to the National Settlement Depository (NSD) to pay coupon yield on sovereign Eurobonds maturing in 2042, the ministry said.

NSD received the funds, so obligations to service government securities were honored in full, it said.

The decree of June 22, 2022 approved a new procedure for servicing sovereign debt, with all payments on Eurobonds made in rubles.

The decree of June 22, 2022 approved a new procedure for servicing sovereign debt, with all payments on Eurobonds made in rubles.

At the end of June 2022, the Finance Ministry transferred rubles to the NSD to pay the coupons on three Eurobond issues under this arrangement: dollar-denominated bonds maturing in 2027, 2047 and 2028. In the second half of the year, the ministry transferred payments in rubles to the NSD on dollar-denominated Eurobonds maturing in 2023, 2026, 2043, 2029, 2035, 2030 and 2042, as well as euro-denominated Eurobonds maturing in 2025, 2027 and 2032. In addition, coupons were paid in rubles for a second time on the bond issues maturing in 2027, 2047 and 2028, and in March 2023 on bonds maturing in 2023, 2029, 2935 and 2043.

This is the second time the ministry has made payments on the 2042 dollar bond in rubles.

The Finance Ministry has divided holders of Eurobonds into three groups, depending on the infrastructure through which their ownership rights are recorded.

The first group includes investors who hold their bonds in depo accounts at the NSD or its Russian sub-depositories; payments to these bondholders are made in the usual way and no additional actions are required from them.

The second group consists of investors whose bonds are held in a Russian depository that is itself a depositor of a senior foreign depository. Payments to them will be conveyed by the NSD through Russian depositories, bypassing foreign intermediaries, after the disclosure of information about the number of recorded bonds attributable to their depositors.

The third group consists of investors whose bonds are held directly in foreign depositories. Payments intended for them are transferred to a special "I" type ruble account at the NSD, where the funds are indexed according to the current market exchange rate of the currency in which the bonds are denominated until the actual payment to the bondholder. Investors in this group have to independently contact the NSD or an intermediary organization and provide documentary confirmation of their ownership rights to the Eurobonds.