The Bank of Russia has stopped accepting bonds of the mining and metallurgical company Mechel as collateral for loans. As stated in the official press release of the regulator, to adjust the value of the company’s bonds from November 14, “an adjustment factor of zero is used.” The Central Bank did not explain why they made this decision.

On November 13, Mechel shares collapsed by almost 50 percent during trading on the Moscow Exchange and were trading around 50 rubles, but then the fall stopped somewhat. At the opening of the New York NYSE, the company's share price fell by more than 40 percent.

According to business media, the reason for the collapse in quotations was investors' fears for the financial stability of Mechel. As the Vedomosti newspaper wrote , since 2008, the company's debt has almost doubled, but Mechel does not have the funds to repay them.

At the beginning of October, it became known that Mechel turned to creditors with a request for covenant holidays - a review of the conditions for issuing loans. In the same month, the metallurgical company reported a loss of ten billion rubles for the first three quarters of 2013, while a year earlier it made a profit of 22 billion rubles.

Mechel itself explained that the sharp drop in share prices was caused solely by market speculation. The company emphasized that no negative events are occurring in its activities. On November 14, at the beginning of trading on the Moscow Exchange, Mechel’s quotes increased by more than ten percent and exceeded 60 rubles.

In turn, the Bank of Russia Financial Markets Service (FMS) began analyzing transactions with Mechel shares.

The last time Mechel's shares fell so much was in mid-2008, when the activities of the company and its main owner Igor Zyuzin were criticized by Vladimir Putin, who was then Prime Minister. Five years ago, the metals company's shares fell by almost 40 percent.

The Central Bank refused to accept Mechel bonds