Russia attempted to pay in rubles for two dollar-denominated bonds that matured on April 4, S&P said in a note on Friday. The agency said this amounted to a “selective default” because investors are unlikely to be able to convert the rubles into “dollars equivalent to the originally due amounts.”
Moscow has a grace period of 30 days from April 4 to make the payments of capital and interest, but S&P said it does not expect it will convert them into dollars given Western sanctions that undermine its “willingness and technical abilities to honor the terms and conditions” of its obligations.
But the US Treasury has since blocked the country from accessing its reserves at American banks.
Kremlin spokesperson Dmitry Peskov said in a press conference last week that any default would be “artificial” because Russia has the dollars to pay — it just can’t access them.
“There are no grounds for a real default,” Peskov said. “Not even close.”
— David Goldman contributed reporting.