At least two holders of Russian government bonds earned their accrued interest on Wednesday. They confirmed this to the news agency Reuters† Payments would have been made in dollars, not rubles. That would mean that Russia appears to have gotten away with default for the time being.
On Thursday morning, the Russian Ministry of Finance confirmed the payment of $117.2 million to one of the Western banks. In this way the funds must be directed to the accounts of the bondholders. Payment was made in a foreign currency. “We have no problems in fulfilling our obligations,” the ministry said in a statement on Telegram.
† Bankruptcy is inevitable for the Kremlin
The US Treasury said, on Wednesday evening, that the current sanctions should not stand in the way of payment. Russia can offer interest, dividends, or repay bonds or shares until May 25. The relevant license will expire on that date.
So at the moment, Russia can fulfill its obligations, but the question is what will happen next. The Russian Finance Ministry has announced that it will pay in rubles if dollar transactions become impossible. But credit rating agencies see this as a default.
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