Event Publicly Available Information:
Has a Potential Failure to Pay occurred in respect of The Russian Federation under Section 1.48 of the 2014 Definitions
A "Potential Failure to Pay" is relevant to the operation of the "Grace Period Extension" mechanics in the 2014 Definitions. A "Potential Failure to Pay" does not constitute a Credit Event as it is tested "without regard to any grace period".
The following information was submitted by the Eligible Market Participant in support of the question:
Business Insider News Story: https://markets.businessinsider.com/news/bonds/russia-default-debt-bonds-payment-rubles-us-dollars-treasury-sanctions-2022-4
Bloomberg News (available via Bloomberg Terminal, published 6 April) – headline: “Russia says foreign banks rejected $649.2m bond payment" Also reported here: https://www.bnnbloomberg.ca/russia-says-foreign-banks-rejected-649-2-million-bond-payment-1.1748366
Bloomberg News Story: https://www.bloomberg.com/news/articles/2022-04-06/russia-says-foreign-banks-rejected-649-2-million-bond-payment
Reuters News Story: https://www.reuters.com/world/europe/russia-says-it-had-pay-roubles-holders-eurobonds-2022-04-06/ #
Interfax News Story: https://interfax.com/newsroom/top-stories/77854/
| Date | Description | Document |
|---|---|---|
| Closed | EMEA DC Meeting Statement – 6 May 2022 The EMEA DC met today and agreed to close the DC Question as (i) the EMEA DC has previously answered the DC Question relating to whether or not a Potential Failure to Pay Credit Event has occurred; and (ii) as previously noted, the EMEA DC has ceased its preparatory process for publishing an Initial List of Deliverable Obligations in respect of the Russian Federation. | |
| Ongoing | EMEA DC Meeting Statement - 3 May 2022 The EMEA DC met on 3 May 2022. As per the meeting statement issued on 29 April 2022, the EMEA DC notes news reports that the Reference Entity has transferred USD funds to the relevant Paying Agent in respect of the relevant Bonds to cure the default in respect of the Potential Failure to Pay. The EMEA DC further notes news reports relating to the payment of such funds to an international clearinghouse and certain end-holders. The EMEA DC expresses no view in respect of such events and continues to monitor the situation. However, in light of such events, the EMEA DC will defer publication of an Initial List of Deliverable Obligations. | |
| Ongoing | EMEA Meeting Statement - 29 April 2022 The EMEA DC met on 29 April 2022. The EMEA DC previously determined that a Potential Failure to Pay occurred in respect of the Russian Federation in respect of certain payment obligations under the 2022 Bonds and 2042 Bonds. The EMEA DC notes news reports that the Reference Entity has transferred USD funds to the relevant Paying Agent in respect of such Bonds to cure the default in respect of the Potential Failure to Pay. The EMEA DC currently expresses no view in respect of such events but continues to monitor the situation. Solely in order to prepare for the possibility of a Failure to Pay Credit Event and the efficient administration of a potential Auction should a Failure to Pay Credit Event occur, the EMEA DC has published a Preliminary List of Deliverable Obligations for the purposes of a potential Auction. Please contact the DC Secretary if you would like to submit additional obligations for consideration by the EMEA DC for the purpose of the Initial List. Please submit such additional obligations by 5:00 pm London time on 3 May 2022. The publication of the Preliminary List of Deliverable Obligations is not an indication of the EMEA DC’s view on the likelihood of any Credit Event occurring in respect of the Reference Entity. To the extent that a Failure to Pay Credit Event does occur upon the expiry of the grace period, the EMEA DC noted that it would seek to hold the Auction shortly following making such Credit Event determination and the Auction Settlement Terms would provide for an accelerated Physical Settlement Period. | |
| Ongoing | The EMEA DC met today to prepare for holding an Auction in case a Failure to Pay Credit Event occurs in respect of the Russian Federation. The EMEA DC agreed to meet again on Friday 29 April to continue discussions. | |
| Ongoing | EMEA DC Meeting Statement - 21 April 2022 The EMEA DC met on Wednesday 20 April 2022 to further discuss whether a Potential Failure to Pay had occurred with respect to The Russian Federation (the Reference Entity). According to press reports, the Reference Entity did not make payment in USD in respect of (i) principal and interest on the USD 4.50% notes due April 2022 (ISIN: XS0767472458 and US78307ADC45) (the 2022 Bonds); and (ii) interest on the USD 5.625% Bonds due April 2042 (ISIN: XS0767473852 and US78307ADE01) (the 2042 Bonds) (each issued by the Reference Entity). The Reference Entity was required to make such payments of principal and interest in USD on 4 April 2022. The press reports stated that Russia’s Ministry of Finance had transferred Russian rubles to the Russian National Settlement Depositary (NSD) in respect of such amounts in lieu of payment in USD. The EMEA DC concluded that the transfer of Russian rubles to the NSD was not sufficient to discharge Russia’s payment obligations under the terms of the 2022 Bonds and the 2042 Bonds. Therefore, the EMEA DC determined that (i) the Reference Entity had failed to make, when and where due, payments in an aggregate amount of not less than the Payment Requirement under one or more Obligations in accordance with the terms of such Obligations at the time of such failure and accordingly a Potential Failure to Pay had occurred with respect to the Reference Entity in relation to 2014 Transactions; and (ii) the date of such Potential Failure to Pay was 4 April 2022. The EMEA DC noted that a "Potential Failure to Pay" is relevant to the operation of the "Grace Period Extension" mechanics in the 2014 Definitions and that a "Potential Failure to Pay" does not itself constitute a Credit Event. A Failure to Pay Credit Event requires that the relevant grace period has expired and the EMEA DC noted that each of the 2022 Bonds and 2042 Bonds include a 30 calendar day grace period in respect of the non-payment of interest and principal. | |
| Ongoing | EMEA DC Meeting Statement - 13 April 2022 The EMEA DC met today to discuss the DC Question. The EMEA DC agreed to meet again on Wednesday 20 April 2022 to continue discussions. If an Eligible Market Participant has a public copy of the Fiscal Agency Agreement in respect of the 2022 Bonds or the Fiscal Agency Agreement in respect of the 2042 Bonds and is able to supply it to the EMEA DC, please contact the DC Secretary. | |
| Request Accepted by DC | ||
| Pending DC Consent |