What to expect as Russia warns of historic debt default (Wednesday)

Financial Times ^ | 3/15/2022 | Tommy Stubbington and Robin Wigglesworth

[marcusmaximus]

Russia is due to make two interest payments on its dollar bonds on Wednesday, but it is unclear whether western investors will actually receive their cash, potentially lining up a uniquely messy government debt default.

Russia’s first default since 1998, and its first default on foreign-currency debt since the Russian Revolution, would complete a staggering turnround.

Before it invaded Ukraine, Russia was considered one of the most creditworthy countries in the world, with its low debt levels and vast oil and gas exports.

But unprecedented western sanctions aimed at cutting off Russia from the global financial system have sent the country’s markets into freefall and complicated the process of servicing debts.

Will Moscow pay?

Russia is scheduled to hand investors a total of $117mn in interest payments on two of its bonds. It has a standard 30-day grace period in which to pay up. If it does not, that would constitute a default.

[marcusmaximus]

First sovereign debt default by Russia since the 1917 Bolshevik Revolution. Tomorrow.

[blackberry1]

China is the backstop. They don’t need Western money.....

[Tell It Right]

I find it interesting that Russia may have trouble paying its bonds.

What's fascinated me more is people buying Chinese bonds even though China is $1.6 trillion in default on their old "railroad" bonds that they haven't paid a penny on since the 1930's.

England's Iron Lady (Thatcher) told China in the 1980's that if they didn't pay their bonds then China would have access to England's markets. China paid on debts owned by British holders. But not American holders. We should kick China out of our markets until they pay on their debts to us.

[Fai Mao]

China has a lot of debt too.

[TigerLikesRoosterNew]

Straight into the arm of loan shark(China).

[BiglyCommentary]

China is on their way to imploding like Japan did at the end of the 80’s. Back then you had the same types yapping away how they were going to take over everything.

[wiseprince]

Oh well. What difference does it make to them? The world has already reprocessed all of its assets. If my bank did that to me I wouldn’t pay any “debts”. You already stole my collateral so you got what you bargained for. I would actually argue that it was the bank that didn’t hold up their end of the deal.

[wiseprince]

Who are the winners here really? The “leaders” whose country only has 10% inflation? People worldwide ought to remove all their governments.

[cgbg]

“I would actually argue that it was the bank that didn’t hold up their end of the deal.”

You would be correct.

More important, everybody else around the world would notice that the bank should never be trusted again—and should refuse to do business with them.

[bert]

The payments will be made in Ukranian Gold Certificates which are claims on the Ukranian gold reserves not yet conqured

[BiglyCommentary]

Skme some criminal scumbag who committed a a violent home invasion is put in prison, and they can’t make a mortgage payement, it is the scumbag’s fault, not the fault of the police.

[Williams]

“China is the backstop. They don’t need Western money.....”

China IS Western money.

[Vermont Lt]

They defaulted in the ‘90s.

And they say they will pay in rubles if they cannot find banks to release their dollars.

So I guess Putin is loading up railroad cars with paper rubles to dump on the investors front lawns. //sarc

[woodbutcher1963]

I would ask for payment in GOLD.

[nathanbedford]

We should kick China out of our markets until they pay on their debts to us. We should but dare we?

If we were to terminate Chinese access to our financial, raw material and consumption markets we would face an immediate financial crisis and a supply chain disruption that would plunge us into a deep recession if not a deep depression. Yet we should.

If we do not free ourselves of China's seduction we will ultimately have a leftist leader worse than Biden who, provided with ample rationalizations to do so by academia and the media, simply surrenders the country without firing a shot to the Chinese. The raw truth is that we are so compromised, so sold out, so corrupt that we simply cannot bring ourselves to seriously criticize China much less divest ourselves of China. The people, the middle class, probably will not stand the punishment and the elites simply will not do it because it is their rice bowls that would be broken. They are the reason we are shackled to a ruinous relationship with China.

We can take a comparatively small dose of very distasteful medicine now or choke on the reality later.

[DesertRhino]

Why would they pay? We seized 650 billion of their cash and launched an economic nuclear war. We have utterly cut them off economically. It’s comical to think they’ll send a payment.
What if they don’t? We not going to loan them any more?
Wonder which banks will take the big hit before the US taxpayers do?

[wiseprince]

If a cop rapes your wife and you cut off his piece he can argue he never even touched you but that’snot the full story. U.S policy hasn’t been that of just a cop doing their job. Of course people who rely mostly on mainstream media can never imagine Putin didn’t just randomly attack Ukraine for the sole purpose of murdering women and children.

[DesertRhino]

Gold? Gold isn’t money, and you can’t eat it. I hear that constantly. They will pay in rubles and say if our banks want to convert that into dollars, speak with DC. Or they might not pay at all since there’s no reason to.

By the way, they tell me an extra dollar or two on my gallon of gas is my patriotic duty to Ukraine. Guess it’s the bankers and hedge fund boys turn in the barrel! Remember boys, it’s your patriotic chore for Ukraine! Lol

It’s really pretty funny.

[BiglyCommentary]

“Putin didn’t just randomly attack Ukraine for the sole purpose of murdering women and children.”

No it was not random, it was premeditated for a long time, they just needed to concoct some phony pretense that embicles would fall for. Stop defending an evil scumbag.

[DesertRhino]

Cannot disagree with a word you said.