S&P Global Ratings issued the “selective bankruptcy” downgrade late Friday, after Russia arranged to make foreign currency payments in rubles on Monday, when they expire in dollars. He said he did not expect Russia to convert the rubles into dollars within the 30-day grace period. The S&P said in a statement that its decision was based in part on the view that sanctions on Russia for its invasion of Ukraine “are likely to increase further in the coming weeks, hampering Russia’s willingness and technical capacity to comply.” and the terms of its obligations. to foreign debtors “. While Russia has signaled that it remains willing to pay its debts, the Kremlin has also warned that it would do so in rubles if its foreign currency accounts remain frozen. Russia tightened sanctions this week following allegations of war crimes – killings of civilians in the city of Bukha during the Russian military occupation – barring it from using any foreign exchange reserves held in US banks for debt payments. Russia’s finance ministry said Wednesday it had tried to pay $ 649 million for two bonds to an unknown US bank – formerly known as JPMorgan Chase – but that tougher sanctions prevented it from accepting the payment, so it paid in rubles. Western sanctions have severely strained the Russian economy, and S&P and other rating agencies have already downgraded their debt to “junk”, considering a bankruptcy very likely. Russia has used tight capital controls, other austerity measures and oil and gas sales revenues to artificially support the ruble. The country has not defaulted on its foreign debt since the Bolshevik Revolution of 1917, when the Soviet Union emerged. Even in the late 1990s, after the collapse of the Soviet Union, Russia was able to continue to pay its foreign debts with the help of international aid. However, he did not pay the domestic debt.
title: “S P Downgrade Indicates Russia Headed For Historic Default " ShowToc: true date: “2022-11-25” author: “Christopher Goforth”
By FRANK BAJAK Associated Press April 9, 2022, 8:00 p.m. • 3 minutes reading Share to Facebook Share to Twitter Email this article BOSTON – Credit rating agency Standard & Poor’s downgraded its rating on Russia’s ability to repay its foreign debt, signaling growing prospects that Moscow will soon default on foreign loans for the first time in more than a century. S&P Global Ratings issued the “selective bankruptcy” downgrade late Friday, after Russia arranged to make foreign currency payments in rubles on Monday, when they expire in dollars. He said he did not expect Russia to convert the rubles into dollars within the 30-day grace period. The S&P said in a statement that its decision was based in part on the view that sanctions on Russia for its invasion of Ukraine “are likely to increase further in the coming weeks, hampering Russia’s willingness and technical capacity to comply.” and the terms of its obligations. to foreign debtors “. A S&P spokesman said a selective default rating is when a lender defaults on a particular payment but makes others on time. While Russia has signaled that it remains willing to pay its debts, the Kremlin has also warned that it would do so in rubles if its foreign currency accounts remain frozen. Russia tightened sanctions this week following allegations of war crimes – killings of civilians in the city of Bukha during the Russian military occupation – barring it from using any foreign exchange reserves held in US banks for debt payments. Russia’s finance ministry said Wednesday it had tried to pay $ 649 million for two bonds to an unknown US bank – formerly known as JPMorgan Chase – but that tougher sanctions prevented it from accepting the payment, so it paid in rubles. Western sanctions have severely strained the Russian economy, and S&P and other rating agencies have already downgraded their debt to “junk”, considering a bankruptcy very likely. Russia has used tight capital controls, other austerity measures and oil and gas sales revenues to artificially support the ruble. The country has not defaulted on its foreign debt since the Bolshevik Revolution of 1917, when the Soviet Union emerged. Even in the late 1990s, after the collapse of the Soviet Union, Russia was able to continue to pay its foreign debts with the help of international aid. However, he did not pay the domestic debt.
