Russia's Finance Ministry transfers 19.6 bln rubles to NSD for payments on 2027 and 2047 Eurobonds

MOSCOW. June 23 (Interfax) - The Russian Finance Ministry has, in accordance with a presidential decree of June 22, transferred 19.6 billion rubles or the equivalent of $234.8 million to the National Settlement Depository to pay coupon yield on sovereign Eurobonds maturing in 2027 and 2047, 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 Finance Ministry used this mechanism for payments on FX-denominated Eurobonds for the first time exactly a year ago.

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 further action is required of 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 Type I 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.

Finance Minister Anton Siluanov said in April that foreign holders of Russian sovereign Eurobonds were still in no hurry to collect their payments. "No one is particularly rushing so far, as they are concerned about sanctions interaction with the Finance Ministry," Siluanov said.