State-owned company Russian Railways has been ruled in default after failing to pay a bond coupon due on March 14. An attempted payment to shareholders was blocked last week by Western financial institutions.
The International Swaps and Derivatives Association (ISDA) announced on Monday that “a Failure to Pay Credit Event occurred in respect of [Russian Railways],” which effectively puts the company in default over the payment.
The company tried to pay the bond coupon, but the payment did not reach investors by the end of a 10-day grace period due to “legal and regulatory compliance obligations within the correspondent banking network.” This refers to sanctions placed on Russia following the launch of a military operation in Ukraine. Sanctions, among other things, blocked Russia’s accounts in the US, EU and some other countries, effectively denying Moscow an opportunity to conduct financial transactions with foreign institutions.