Russia defaults on foreign debt for first time since 1917 revolution – reports

theguardian.com:

Russia has defaulted on its foreign debt for the first time since the 1917 revolution, according to reports, further alienating the country from the global financial system after sanctions imposed over its war in Ukraine.

The country missed a deadline of Sunday night to meet a 30-day grace period on interest payments of $100m on two Eurobonds originally due on 27 May, Bloomberg reported on Monday morning.

Some Taiwanese holders of Russian Eurobonds said on Monday that they had not received interest payments due, two sources told Reuters.

Official confirmation of the default was expected to come from international ratings agencies.

Russia’s efforts to avoid what would be its first major default on international bonds since the Bolshevik revolution more than a century ago hit a insurmountable roadblock in late May when the US treasury department’s office of foreign assets c (OFAC) effectively blocked Moscow from making payments.

“Since March we thought that a Russian default is probably inevitable, and the question was just when,” Dennis Hranitzky, head of sovereign litigation at law firm Quinn Emanuel, told Reuters. “OFAC has intervened to answer that question for us, and the default is now upon us.”

While a formal default would be largely symbolic given Russia cannot borrow internationally at the moment and does need to thanks to plentiful oil and gas export revenues, the stigma would probably raise its borrowing costs in future.

Russia, which has offered to pay the debts in roubles, calls any default artificial because it has the money to pay its debts but says sanctions have frozen its foreign currency reserves held abroad.

“It’s a very, very rare thing, where a government that otherwise has the means is forced by an external