LONDON, May 3 (Reuters) – Russia appears to have fended off the threat of a sovereign debt default by late paying interest owed on two bond issues to some creditors, a source familiar with the matter said on Tuesday. .
While the grace period on these payments is about to expire (May 4), the Russian Ministry of Finance announced on Friday the payment of nearly 650 million dollars (618 million euros) of coupons and principal to title holders.
A senior US official confirmed that Russia had made the payment without resorting to reserves frozen by the United States, adding that the exact origin of the funds used was not clear.
The source, who requested anonymity, said the funds were transferred to certain bondholders on Monday.
Russia’s foreign debt, which represents some 40 billion dollars, has been one of the sources of tension between Moscow and the West since the invasion of Ukraine at the end of February.
The multiple sanctions taken by Western countries against Russia have complicated payments on sovereign bonds as well as on securities issued by Russian companies, with several large groups, such as Russian Railways, the operator of the Russian rail network, now being unable to transfer funds on time.
The payments due on April 4 were for a loan that matured that day and interest on another maturing in 2024.
Market attention is now shifting to coupons due May 27 on a dollar bond issued in 2016 and a euro bond issued in 2021.
These deadlines will occur after the expiry, scheduled for May 25, of the temporary license granted by the United States to allow transactions related to Russian sovereign bonds.
The US Treasury has not commented on a possible extension of the expiration of this license.
(Report Karin Strohecker, French version Marc Angrand, edited by Kate Entringer)