S&P cuts Russia's foreign currency rating to 'selective default'

[Rogue Valley]

S&P cuts Russia's foreign currency rating to 'selective default'

4.9.22
S&P on Saturday lowered Russia's foreign currency ratings to "selective default" on increased risks that Moscow will not be able and willing to honor its commitments to foreign debtholders. Facing waves of sanctions over its invasion of Ukraine, Russia could face its first sovereign external default in over a century after it made arrangements to make an international bond repayment in rubles this week, even though the payment was due in dollars. S&P said in a statement it understood that Russia had made coupon and principal payments on dollar-denominated Eurobonds in rubles on Monday. "We currently don't expect that investors will be able to convert those ruble payments into dollars equivalent to the originally due amounts, or that the government will convert those payments within a 30-day grace period." Sanctions on Russia are likely to be further increased in the coming weeks, the agency said, "hampering Russia's willingness and technical abilities to honor the terms and conditions of its obligations to foreign debtholders."

Russia's finance minister on Thursday said the country will do everything possible to pay its creditors, but investors in Russia's international bonds face an increasingly uncertain path to recover their money should the country default. S&P assigns a selective default rating when it believes the debtor has selectively defaulted on a specific issue or class of obligations but will continue to meet its payment obligations on other issues or classes of obligations in a timely manner. Russia has not defaulted on its external debt since the aftermath of its 1917 revolution, but its bonds have now emerged as a flashpoint in its economic tussle with Western countries. A default was unimaginable until recently, with Russia rated as investment grade in the run-up to its Feb. 24 invasion of Ukraine, which Moscow calls a "special military operation".

The Kremlin could have made these two sovereign debt payments with the required USD, but chose instead to either use or save its hard currency dollars for other purposes.

Explainer-Clock ticks down towards a Russian default

 

[Roadvirus]

So...when does the Ruble get downgraded to "Toilet Paper"? "Don't squeeze the Rubles!"

 

[Juin]

So...when does the Ruble get downgraded to "Toilet Paper"? "Don't squeeze the Rubles!"

Dont Dollars, Euros, Roubles, Yuans, Rupees rise or fall based on how they hold up to market forces? Does a currency become rubbish just because Senile Joe so declared the Rouble the other day? The Rouble will crater to "Toilet Paper" if the Russian economy tanks. Rise and fall of currencies are a reflection of how their economies are holding up. For the moment those evil Russians still have a commodity Europeans cannot afford to forego in the short term: gas. And as long as you gonna buy from the Russians then in a way you are also helping hold up the Rouble.

The present situation is tricky in that a default means an inability to meet one's financial obligations. Russia is not yet there. It seems to me like where we are is a twilight zone where, after kicking Russia out of the Dollar/Euro club somekind of mechanism has to be arrived at as to how purchasers of Russian commodities pay for them, and how Russia also pays its debtors.

 

[Rogue Valley]

Russia says it will sue if forced into a default — which would be the country's first sovereign debt default in over a century

4.11.22
Russia's finance minister said the country would take legal action if it's forced to default on its external debt, the Izvestia newspaper reported on Monday. Russia is facing a historic sovereign default after the US Treasury blocked the country's dollar payment to international bondholders last week. Russia last defaulted on its foreign debt more than a century ago, in 1917 during the Bolshevik Revolution. "Of course, we will sue, because we have taken all the necessary steps to ensure that investors receive their payments," Finance Minister Anton Siluanov told the pro-Krelim Izvestia in an interview. He did not elaborate on specific actions. Sanctions hamper Russia's foreign currency debt payments, as they need to go through international intermediaries. Even so, Russia had managed to meet its debt obligations until last Monday, when the US blocked its dollar payments in the greenback. The Kremlin responded by transferring the money in rubles. "If an economic and financial war is waged against our country, we are forced to react, while fulfilling all our obligations. If we are not allowed to do it in foreign currency, we do it in rubles," Siluanov told Izvestia.

No, you don't get to abridge contracts. The two sovereign debt payments that were due last week specified that payments must be made in USD, not rubles.

Moscow has 27 days remaining to make this right.

 

[OrphanSlug]

No matter how you cut this, Putin / Russia is ****ing this all up harming their people and their nation for years to come.

 

[HangLow]

S&P cuts Russia's foreign currency rating to 'selective default'

The Kremlin could have made these two sovereign debt payments with the required USD, but chose instead to either use or save its hard currency dollars for other purposes.

Explainer-Clock ticks down towards a Russian default

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