U.S. Treasury Has Cut-Off Russia's Ability To Pay Bondholders Through U.S. Banks

 

Daily Mail: Russia edges closer to first debt default since Bolshevik Revolution as US cuts off its ability to pay its creditors 

* US to cut off Russia's ability to pay international creditors at midnight tonight 

* The move makes a sovereign debt default almost inevitable, the first in a century 

* EU also clamping down on oligarchs evading sanctions and protecting assets 

* New rules to permit seizing their assets to help pay for Ukrainian reconstruction 

Moscow is edging closer to defaulting on its national debt for the first time since the Bolshevik coup more than a century ago after the US cut off its ability to pay creditors today. 

The Treasury Department said in a notification that it does not plan to renew the license that allowed Russia to keep paying its debtholders through American banks, making a Russian default all but inevitable. 

Since the first rounds of sanctions, the Treasury Department has given banks a license to process any dollar-denominated bond payments from Russia. That window expires at midnight of May 25.  

Read more ....  

WNU Editor: Aside from the Western media and political narrative that will now say Russia is officially bankrupt, it will not change how Russia is currently doing business. Everyone knows this is a politically engineered default, and will only result in the creditors suing the US government to have access to the Russian funds that Washington seized after the invasion of Ukraine. 

What is noteworthy is that this is the first step that Washington must go through in order to justify what it wants to do with the $300+ billion that was seized from Russia. The current line is that the funds will be used for Ukraine reconstruction. I am skeptical that it will be used in such a manner. 

Update: Kremlin says it will pay-off these bond coupons with rubles .... Russia to Service Debt in Rubles After US Closes Loophole (Bloomberg).  

Update #2: The Russian ruble continues to trade at an 8 year high vs. the US dollar (link here). 

 U.S. Treasury Has Cut-Off Russia's Ability To Pay Bondholders Through U.S. Banks

U.S. To End Russia's Ability To Pay Bondholders Through U.S. Banks -- RFE 

Russia pushed closer to brink of default after U.S. payment license expires -- Reuters  

US says ending Russia debt payment exemption -- France 24  

Russia Edges Closer to Default as US Lets Key Waiver Expire -- Bloomberg  

U.S. to end Russia's international debt payment waiver -- Axios  

Russia is now exposed to a historic debt default: Here’s what happens next -- CNBC