Russia faces deadline for more than $600 million in bond payments as default fears still loom

• Russia faces a deadline for more than $600 million in bond payments that are due Monday.
• That includes $552 million remaining on a 2022 bond repayment and a coupon payment of $84 million for a 2042 bond.

The Russian government is staring down a Monday deadline for more than $600 million in outstanding bond payments as the Kremlin continues to stave off debt default fears.

Last week, the Finance Ministry said it used rubles to repurchase 72% of $2 billion in debt that matures Monday, or about $1.45 billion. That still leaves about $552 million owed on the 2022 bond. Russia said it plans to buy back the maturing bond in full.

Bondholders who chose not to take the ruble-buyback offer will be paid in US dollars on Monday, sources told Reuters.

Meanwhile, Russia is coming up against another April 4 deadline for a coupon payment of $84 million on a separate 2042 bond.

Last week, Russia narrowly avoided a default after JPMorgan processed a $447 million dollar-denominated bond payment, despite Clearstream blocking Russia from a key clearinghouse for foreign debt payments the week prior.

Western sanctions slapped on Russia following its invasion of Ukraine have meant money is only slowly trickling through the system, as banks seek approval from the US Treasury to process funds.

Russia has so far kept up payments on its foreign currency denominated bonds, despite major ratings agencies saying in early March that a debt default was highly likely.

Meanwhile, the ruble has regained much of its value over the last week, hovering close to pre-invasion levels amid ongoing peace talks between Ukraine and Moscow.