Russia may have defaulted on its debt for first time in 100 years: Moody's
Russia tried to service the debt in rubles when it was mandated that payment be in dollars
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Russia may have defaulted on foreign bonds for the first time since the years following the 1917 Bolshevik Revolution.
That's the word from credit agency Moody's after Moscow tried to service its debt in rubles.
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Russia is required to service its debt in U.S. dollars, according to Reuters.
Russian President Vladimir Putin (Mikhail Klimentyev, Sputnik, Kremlin Pool Photo via AP / AP Images)
Moscow made payments on April 4 on two sovereign bonds maturing in 2022 and 2042.
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Russia "therefore may be considered a default under Moody's definition if not cured by 4 May, which is the end of the grace period," Moody's said in a statement on Thursday.
A picture taken shows the Vodovzvodnaya Tower of the Kremlin (L) and the Ministry of Foreign Affairs of Russia's building. ((Photo by NATALIA KOLESNIKOVA/AFP via Getty Images) / Getty Images)
Another credit agency, Standard & Poor's, issued a downgrade of Russia's foreign currency rating a week ago, increasing the prospect of Moscow defaulting on external loans for the first time in more than a century.
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It was at that time S&P didn’t expect Russia to be able to convert the rubles into dollars within the 30-day grace period allowed.
Russia has said it wants to service its debt, but the sanctions put on it by Western nations has prevented it.
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At one point, the U.S. Treasury blocked a transfer of a $649 million to holders of sovereign bonds, keeping Russia from using any of its frozen foreign currency reserves, according to a previous report from Reuters.