Russian sanctioned companies ordered to pay bondholders
smartmoney.onewhose rights are recorded in the Russian depositories, by transferring funds in the manner specified by the Board of Directors of the Bank of Russia (details will follow later), or by issuing new bonds.This news is positive for local investors, who will finally get their due income from Eurobonds in line with the payment schedule.Newly issued securities will trade in a secondary market, and are supposed to be in demand by many Russian investors willing to invest in non-ruble assets without the risk of getting seized. The new securities will be most in demand among sanctioned issuers who have cut off from foreign payment infrastructure and are still in negotiations with NSD (e.g.Severstal, MMC, State Transport Leasing Company), etc.However, it is not yet clear how the order will apply to non-sanctioned issuers who have been meeting their obligations in line with bond prospectus (i.e.by sending funds in foreign currency to Euroclear accounts).
For them, new bonds will be nothing but a bigger debt burden, provided they do not breach the original bond payment terms.Sanctioned issuers who are due to make foreign currency payments by the end of July include Sovcomflot ($5.1 mln), Alfa Bank and Promsvyazbank.