The move by the ratings agency came after Russia was unable to use dollars held in American banks to make a payment of about $650 million on its debt. It used rubles instead.
S&P Global has placed Russia under a “selective default” rating after the Russian government said last week that it had repaid about $650 million in dollar-denominated debt in rubles. The ratings agency said late Friday that it didn’t expect investors to be able to convert the ruble payments into U.S. dollars that were equivalent to the original amount due, pushing Russia toward its first default on foreign currency sovereign debt in more than a century. The bonds do have a 30-day grace period, giving the Russian government time to repay in dollars or find some other way to avoid a default. S&P Global said it didn’t expect the government to convert the payments within the grace period. “Sanctions on Russia are likely to be further increased in the coming weeks, hampering Russia’s willingness and technical abilities to honor the terms and conditions of its obligations to foreign debt holders,” the ratings agency said. The move by S&P Global came after a dollar-denominated Russian government bond matured and another coupon payment came due on April 4.
