Russia may be in default, warns Moody's

By Aysu Bicer

ANKARA (AA) - Russia may be in default as it tries to pay its dollar bonds in rubles, Moody's said on Friday.

In its latest statement, the international credit rating agency said that by repaying its foreign currency bonds in rubles, Russia is not meeting its contract promises.

Russia made a payment due on April 4 on two sovereign bonds -- maturing in 2022 and 2042 -- in rubles instead of the dollars it was obliged to pay under the terms of the securities.

Russia "therefore may be considered a default under Moody's definition if not cured by 4 May, which is the end of the grace period," Moody's warned on Thursday.

There is no provision in the bond contracts for repayment in any other currency than dollars, it underlined, adding that while some Russian eurobonds issued after 2018 allowed payment in rubles under certain conditions, those issued before 2018 do not.

"Moody's view is that investors did not obtain the foreign-currency contractual promise on the payment due date," the agency said.