Russia moved closer to averting its first debt default since 1998 as payments on two of its dollar bonds moved through the western financial system on the way to investors.
The country’s foreign-currency government bonds have rallied as evidence emerges that $117mn in coupon payments, which were due this week, are making their way along the chain that separates the Russian government from investors.
Euroclear and Clearstream, the main international securities depositories, have received and processed two coupons from payment agent Citigroup, according to people familiar with the matter. The duo, which declined to comment, settle trades on behalf of investors and transfer money between bank accounts. The funds will then be passed to custodian banks before finally reaching investors. One investor told the Financial Times they had received the funds in their bank account.
JPMorgan had earlier processed the payments that had been due on two bonds on Wednesday, passing the money to Citi, according to a person familiar with the matter. JPMorgan made the decision to process the payment after consulting with US authorities, the person added. Citi and JPMorgan both declined to comment.