Moody's: "Russia's Payment of Dollar Bonds in Rubles is a 'Default'"

[Asia Economy New York=Special Correspondent Joselgina] International credit rating agency Moody's warned on the 14th (local time) that Russia's payment of principal and interest on dollar-denominated bonds in rubles could be considered a 'default'.

Moody's stated in a press release that "the Russian government's payment of principal on two foreign debts due earlier this month in rubles changed the payment terms of the existing contracts." The contracts specify payment only in dollars and do not include provisions allowing payment in other currencies such as rubles under special circumstances.

Accordingly, Moody's confirmed that if the settlement currency is not changed back to dollars by May 4, when the 30-day grace period ends, it could be considered a default under its regulations. Currently, Russia is unable to pay principal and interest in foreign currencies other than rubles due to sanctions from the United States and other Western countries.

Earlier, another credit rating agency, S&P, downgraded Russia's foreign currency-denominated bond credit rating to SD, indicating selective default, after the Russian government paid about $650 million of the repayment amount in rubles last week.

The International Institute of Finance (IIF), which includes over 450 global financial institutions such as Goldman Sachs, also stated that such ruble payments constitute a default.

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