S&P Global has downgraded Russia to “selective bankruptcy,” meaning analysts believe the country is already failing to meet one or more of its financial obligations. He was also linked to rivals Moody’s and Fitch in abandoning coverage of the country after the European Union banned it from providing ratings to Russian entities. The move came after Moscow violated its terms for two government bonds by paying holders in rubles instead of dollars. “The depreciation of the foreign currency follows our understanding that the Russian government made coupon and capital payments for the 2022 and 2042 Eurobonds in US dollars in rubles when those payments expired on April 4, 2022,” S&P said in a statement this morning. Saturday’s. . Russia has been able to prevent a technical bankruptcy so far, despite heavy Western sanctions that have cut off access to much of its minimal foreign currency. The White House has stepped up pressure to stop paying dollar-denominated debt from Moscow-based bank accounts in the United States. If it is deemed to have gone bankrupt, it will be the first time Russia has failed to meet its obligations to foreign bondholders since the aftermath of the Bolshevik revolution a century ago. S&P noted that Russia still has a 30-day window in which it can deflect bankruptcy by making dollar payments, but said this seemed unlikely. Analysts wrote: “Although defaults could be remedied with a 30-day grace period allowed under the terms and conditions of the bonds, we do not expect investors to be able to convert these payments into rubles equivalent to dollars equivalent to the amounts originally due, or that the government will convert these payments within this grace period. “This is partly because, in our view, sanctions against Russia are likely to increase further in the coming weeks, hampering Russia’s willingness and technical capacity to meet the terms and conditions of its obligations to foreign debtors.”
