Russia has already failed to repay its debt, a group of officials and investors concluded. The Credit Derivatives Determination Committee (CDDC) defaulted this Wednesday in a decision that could trigger the repayment of $3.2 billion in credit default swaps.
We are talking about a line of bonds, the payment of which was supposed to be made on April 4, 2022. This amount was only paid on 2 May, so the committee felt that interest relating to days past due should have been included. Including a coupon of 4.5%, the 30-day delay required an additional amount of interest in the amount of 1.9 million euros, which was not paid.
“Russia did not include interest rates maturing after April 4, 2022 in its payment, putting these obligations in default. sounded the alarm in April.
After the non-compliance is declared, the points of the swap contracts can be activated. Bloomberg estimates that the return could be as high as $3.2 billion. However, the final cost will be auctioned off.
A formal declaration of “default” would have traditionally been made by the rating agencies, but they were forced to withdraw coverage of the country’s debt, revising the “rating” downward to a level close to the latest rating levels, due to sanctions.
