Russia In Historic Default As Ukraine Sanctions Cut Off Payments

• Russia defaulted on its international bonds for the first time in more than a century, the White House and Moody's credit agency said, as sweeping sanctions have effectively cut the country off from the global financial system, rendering its assets untouchable. 
• The Kremlin, which has the money to make payments thanks to oil and gas revenues, has rejected the claims, and accused the West of driving it into an artificial default. 
• Some bondholders said they had not received overdue interest on June 27, 2022, following the expiration of a key payment deadline on June 26. Moody's credit agency later said that the missed coupon payment constituted a default. Russia has struggled to keep up payments on $40Bn of outstanding bonds since its invasion of Ukraine on Feb. 24. 
• Russia's finance ministry said it made the payments to its onshore National Settlement Depository (NSD) in euros and dollars, adding it had fulfilled obligations. On the other hand, credit rating agencies usually formally downgrade a country's credit rating to reflect default, but this does not apply in the case of Russia as most agencies no longer rate the country. 
• A formal default would be largely symbolic given Russia cannot borrow internationally at the moment and doesn't need to thanks to its oil and gas export revenues. However, the stigma would probably raise its borrowing costs in future.

(Source: Reuters