Russia is technically in default at the end of the grace period on a $100 million bond payment. Kremlin spokesman Dmitry Peskov explained that the Russian government wanted to pay the bond, but this was not possible because of sanctions. An intermediary bank had withheld the money and the reserves were blocked “unlawfully,” Peskov explained.
For Russia, that does not change much. Russia won’t lose what it does not have, that is, access to financial markets. However, there is a loss for Western risk insurers, i.e.m sellers of credit default swaps, which is now extended to the entire Russian foreign debt. CDS on Russian debt are estimated at $1.5 billion.
