Russia on the brink of historic debt default as payment period expires

cnbc.com:

Russia could be entering its first major foreign debt default for over a century, after a grace period on two international bond payments lapsed on Sunday night.

Interest payments totaling $100 million were due on May 27 and subject to a grace period which expired on Sunday night. Several media outlets have reported that bondholders have not yet received the payments, after Russia's attempts to pay in its ruble currency were blocked by international sanctions.

Sweeping sanctions imposed by Western powers in response to Russia's unprovoked invasion of Ukraine, along with countermeasures from Moscow, have effectively ostracized the country from the global financial system, but so far the Kremlin has managed to find ways to get payments to bondholders on multiple occasions.

Attempts to circumvent sanctions took a further blow in late May, however, when the U.S. Treasury Department allowed a key exemption to expire. The waiver had previously allowed Russia's central bank to process payments to bondholders in dollars through U.S. and international banks, on a case-by-case basis.

Russian Finance Minister Anton Siluanov suggested earlier this month that Russia may have found another means of payment. Moscow wired the $100 million in rubles to its domestic settlement house, but the two bonds in question are not subject to a ruble clause that would allow payment in the domestic currency to be converted overseas.

Reuters reported early on Monday, citing two sources, that some Taiwanese holders of Russian eurobonds have not received the interest payments due on May 27, indicating that Russia may be entering its first foreign debt default since 1918, despite having ample cash and willingness to pay.

Siluanov reportedly told Russian