Possible bankruptcy was out of the question before the invasion of Ukraine on February 24.
Standard & Poor’s downgraded Russia’s foreign-currency debt rating to ‘selective default’ on Saturday as the Kremlin increased the risk of its inability to meet its obligations to foreign creditors. He writes and Reuters.
Russia, facing a wave of sanctions over the invasion of Ukraine, may face bankruptcy after more than a century. All this after the agreement this week to settle international bonds in rubles, although they were due in dollars.
At the moment, we do not expect investors to be able to convert these ruble payments into dollars equivalent to the amounts originally owed. “The government has no right to transfer these amounts beyond the 30-day grace period,” Standard & Poor’s said in a statement. He believes that sanctions against Russia will be tightened in the coming weeks, “which hampers Russia’s willingness and technical ability to fulfill its obligations to foreign debtors.”
The Kremlin said Thursday that it will do everything in its power to pay off international creditors. Standard & Poor’s will assign a selective default rating if it believes the debtor will continue to partially fulfill its payment obligations in relation to a particular issue or class of liabilities while continuing to meet its payment obligations in respect of other issues or classes of liabilities in a timely manner. Russia has been able to repay properly since the Bolshevik Revolution of 1917, and the prospect of bankruptcy was out of the question before the invasion of Ukraine on February 24.
A spokesman for Vladimir Putin said they could pay, and a possible state bankruptcy would be just an artificial and baseless situation.
