We may never know if S&P changes its mind about Russia’s default. For these bond payments, that grace period ends May 4. Russian gas customers in Europe may accept Putin's payment termsīond payments typically come with a 30-day grace period. Photographer: Bartek Sadowski/Bloomberg via Getty Images Bartek Sadowski/Bloomberg/Getty Images Russia halted gas flows to Poland and Bulgaria in a major escalation, and said it will keep supplies switched off until the two countries agree to Moscow's demands to pay for the fuel in rubles. Pipework at the Wierzchowice Underground Gas Storage Facility, operated by Polskie Gornictwo Naftowe i Gazownictwo SA, also known as PGNiG, in Wierzchowice, Poland, on Wednesday, April 27, 2022.
Although the dollar payments are already overdue, Russia’s late payment in dollars serves as a last-ditch effort to avoid default. On April 6, Russia said it had made the payments on those bonds in rubles, leading S&P to declare three days later that Russia was in default on its foreign debt obligations. “In this way, the obligations of servicing sovereign eurobonds are being carried out in observance of the conditions laid out in the issue documentation.” “The payments were made in the currency of issue of the corresponding eurobonds - in US dollars,” Russia’s finance ministry said in a statement. Both payments were made in US dollars, the finance ministry claimed, as required by the bond’s contract stipulations. The country’s finance ministry said in a statement that it made a $565 million eurobond that was due this year, as well as an $84 million eurobond that was set to mature in 2024. The ruble gained ground after the country said it managed to pay back creditors with dollars as Russia tries to avoid a default. Russia’s currency hit a two-year high against the US dollar Friday. Russian President Vladimir Putin’s efforts to support the ruble continue to pay off - and then some.
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