Russia, teetering on the brink of its first international bond default in more than a century, says it will pay rubles on its Eurobonds that will be eligible for redemption as a foreign currency at a later date.
Russia is scheduled to make its next Eurobond payment on June 24, but with Western governments freezing about $300 billion of the central bank's reserves and imposing other sanctions on Moscow in response to its unprovoked invasion of Ukraine, Russia has been unable to service its foreign debt obligations in foreign currency.
Finance Minister Anton Siluanov told state-controlled Rossia-24 on June 16 that the government in Moscow is "making every effort" to ensure investors receive "appropriate payments in order to fulfill all of our obligations."
Under his plan, coupon payments on two dollar-denominated Eurobond issues, Russia-2027 and Russia-2047, on June 23, and on another, Russia-2028, on June 24, will be made in rubles to avoid coming closer to a default, which Russia has not had since the Bolshevik Revolution.
Once it's possible, investors will be able to convert those ruble payments into any foreign currency they want, Siluanov said.
The Finance Ministry has previously said that it will make all bond payments on time as Russia wants to remain "a reliable borrower" on international markets.