Russia and the West disagreed over the default

On June 26, Russia did not pay about $100 million in payments on government bonds. Given that this date was the end of the grace period, foreign publications hastened to recognize the country's technical default. However, the authorities in the country are in no hurry to recognize what happened as a default. At the same time, experts hint that this no longer makes sense for Eurobond holders.

Recall that Russia was obliged to make coupon payments on securities issues before May 27. The Eurobonds themselves assumed repayment in the amounts of $71.25 million and €26.5 million in 2026 and 2036, respectively. This did not happen due to the loss of the license of the US Treasury Department, which allows servicing foreign debt. 

Bloomberg reminds that formally the fact of non-payment constitutes a breach of obligations and can be called a default.

According to American experts, it happened to the country for the first time since 1918. Before that, the Soviet Union and then the Russian Federation paid their bills regularly. 

The Russian authorities do not consider the incident a bankruptcy. According to Finance Minister Anton Siluanov, Russia was forced to make all payments on bonds in rubles, given the artificial obstacles created by Western "partners".

Siluanov noted that this case falls under force majeure, since the country has not declared a refusal to fulfill its obligations to investors. Moreover, the payment of interest on the 2027 and 2047 bond issues of the Russian Federation was made on June 23 in rubles, spending 12.5 billion (about $ 234.85 million at the official exchange rate). 

Russian experts note that to call non-payment in foreign currency of debt on sovereign Eurobonds can be called "bankruptcy" or "default". However, none of these terms reflects the situation.

Economist Anton Prokudin, representing Ingosstrakh-Investments Management Company, recalls that from the position of Western countries, Russia has been in default for a long time. 

This follows from the recognition made by the profile committee CDS (Credit Derivatives Determinations Committees) more than a month ago. Therefore, Bloomberg's statement may have an impact exclusively on the economy of the United States and the income of investors representing Western countries.