The Ministry of Finance made payments on Eurobonds in rubles

The Ministry of Finance reported that, in accordance with the presidential decree of June 22, it made payments on Eurobonds in rubles. Funds for the payment of coupon income on bonds maturing in 2027 and 2047 in the total amount of 12.51 billion rubles (the equivalent of $234.85 million) were received by the National Settlement Depository (NSD), the agency explained. The Ministry of Finance considers the obligations fulfilled in full.

The day before, Vladimir Putin signed a decree on a mechanism for paying off foreign currency debt in rubles. The schema looks like this:

• A ruble account of a special type "I" is opened in the Russian central depository for payments to foreign depositories, taking into account the rights to Russian Eurobonds.
• The beneficiaries of the "I" account are holders of Eurobonds and other persons who are determined by the Ministry of Finance and the Central Bank.
• The register of Eurobond holders registered by foreign depositories is formed on the basis of supporting documents.
• Indexation of funds on accounts "I" is carried out at the official rate of the corresponding currency.
• Payments are made in rubles within the terms stipulated by the prospectus.
• Obligations will be considered properly fulfilled if they are fulfilled in rubles in an amount equivalent to the value of obligations in foreign currency at the official exchange rate on the day the payment is transferred to the central depository.

The Decree makes it possible to service sovereign Eurobonds of Russia registered in Euroclear/Clearstream depositories that have ceased to work with NSD without access to information from foreign depositories.

To whom such a scheme is beneficial and why it will not help to push back the impending default, we explained here .