Bondholders said they received cash to pay off the bonds Monday, according to the people with knowledge of the payments, who declined to be identified because they aren’t authorized to speak publicly about the matter.News of the coupon payment sent the price of the bond sharply higher after crashing to 50% of par last week and was repaid at par today.
“We see a default as the most likely scenario,” Simon Waever, the firm’s global co-head of emerging-market sovereign credit strategy, wrote in a Monday note. “In case of default, it is unlikely to be like a normal one, with Venezuela instead perhaps the most relevant comparison.”
Waever believes that the default may come as soon as April 15, which will mark the end of a 30-day grace period on coupon payments the Russian government owes on dollar bonds due in 2023 and 2043.
According to Bloomberg, Russian bonds due 2023 are trading at around 29 cents on the U.S. dollar, though there appears to have been no trades at those levels. In the days before Russia invaded Ukraine last month, both bonds were trading above par.
While it is rare for sovereign debt to tumble to the single digits, Morgan Stanley said Russia’s bonds “could get close.” Lebanon and Venezuela are the only recent examples of a country’s debt slipping so low.
“The potential for significant further selling will put additional downside pressure on...
1 comment:
What do bet that he bet against the ruble long before he helped trigger this war, and has every intention of buying up all those instruments he has helped drive down the price.
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