The payments are for bonds maturing in 2022 and 2042 and the correspondent bank processes the coupon payments from Russia, sending them to the payment agent for distribution to overseas bondholders.
Sources told Reuters that coupon payments on Russian sovereign bonds had previously been processed, while a US Treasury spokeswoman confirmed that some payments were no longer permitted.
The spokeswoman stated: “Today is the deadline for Russia to repay other debts… From today it will not allow US Treasury Make any dollar debt payments from accounts Russian government at US financial institutions. Russia must choose between attrition dollar reserves residual value, new returns, or defaults.
The source said that Russia has 30 day grace period to make the payment.
Russia, which has a total of 15 international bonds maturing with a face value of about $40 billion, has avoided defaulting on its international debt so far despite unprecedented Western sanctions, but the task is becoming increasingly difficult.
If Russia fails to make any of its subsequent bond payments within their due dates, or pays in rubles instead of dollars, euros or another specified currency, it would constitute a default.
While Russia is unable to access international borrowing markets due to Western sanctions, a default will prevent it from accessing those markets until creditors are paid in full and any legal issues arising from the default are resolved.
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