Russia Makes Early Bond Payment to Avoid Debt Default

The Russian government on May 20 made about $100 million in interest payments on two dollar- and euro-denominated bonds, a week before they were due on May 27. They did this because a key U.S. Treasury Department waiver which allows such payments under the U.S.’s sanctions regimen is set to expire on May 25. Earlier this week, Treasury Secretary Janet Yellen said that it was “unlikely that it [the waiver] would continue,” thus driving Russia into default on their foreign obligations despite their ability and willingness to pay.