Free Republic

Confiscating the assets of companies that have fled Russia since the invasion of Ukraine would shatter investor confidence for decades and take Russia back to the calamitous days of the 1917 Bolshevik revolution, metals magnate Vladimir Potanin has said. Potanin, president and biggest shareholder of Norilsk Nickel, the world's largest producer of palladium and refined nickel, said Russia should respond with pragmatism to its exclusion from swathes of the global economy. "We should not try to 'slam the door' but endeavour to preserve Russia's economic position in those markets which we spent so long cultivating," Potanin, 61, said on the...

Russia’s finance minister said the country would fulfill its debt obligations but would issue payment in rubles until Western nations unfreeze its foreign-currency reserves. The announcement comes ahead of payments due to be made Wednesday on two Russian government dollar bonds. Under the terms of those two specific bonds, payments can only be made in dollars, meaning ruble payment could set the stage for a default on its dollar debt. Bonds typically also have a 30-day grace period for payment.

The Moscow Exchange said Saturday the country’s main stock market will stay closed next week, through March 18. The stock market hasn’t opened since Feb. 25, the day after the invasion and just before the West unveiled a punishing round of sanctions on Russia’s financial system. The suspension delays what is likely to be a painful reckoning for investors in Russian stocks. While trading in Russia has been halted, shares of Russian companies listed in international markets such as London and New York have plunged.

Russia's central bank on Saturday said it has decided not to reopen stock market trading on the Moscow Exchange from March 14-18, with the exception of some non-open-market transactions and transactions using the SPFI payment system.

The cost of Russia's invasion of Ukraine will become a lot clearer this week, with a previously unthinkable sovereign default looming, more emergency central bank measures likely and a stock market crash guaranteed if it reopens. Moscow's "special operation" in its former Soviet neighbour has cut Russia off from key parts of the global financial markets by the West, triggering its worst economic crisis since the 1991 fall of the Soviet Union. Wednesday could mark another low. The government is due to pay $117 million on two of its dollar-denominated bonds. But it has been signalling it will not, or...

BlackRock has taken a $17 billion loss as a result of its Russian exposure since Putin’s invasion of Ukraine began in late February—and it’s not the only Western bank set to take a sizable hit. International banks are owed roughly $121 billion by Russia-linked entities, according to data from the Bank for International Settlements—and because of the recent decoupling of the West and Russia, they are unlikely to get most of that money back. BlackRock’s clients held around $18.2 billion in exposure to Russia-linked assets as of the end of January, the firm revealed. The world’s largest asset manager declined...

With Russia's economy collapsing, its stock market cryogenically frozen and its bonds near default, global investors are set to endure major losses. -snip- BlackRock, the world's largest asset manager, has lost roughly $17 billion on Russian securities as a result of the invasion, the FT reported on Friday. Bond-trading giant Pimco could lose up to $2.6 billion if Russia fails to make its sovereign debt payments, after the asset manager bet big against a default, the FT reports. Italy's second largest bank, Unicredit, said it could lose $8 billion if it has to fully write off — that is, value...

Pimco is at risk of losing up to $2.6 billion if Russia fails to make its debt payments, after the asset manager bet big against a default, according to a Financial Times report. The investing giant holds $1.5 billion in Russian Federation-linked government bonds, the report said, and it had sold $1.1 billion in credit default swaps, or CDS, on Russian sovereign debt at the start of 2022. That means Pimco is vulnerable to lose out on two fronts — the bond holdings and the CDS — if Russia does default on its sovereign debt, which Fitch Ratings has warned...

Russia will soon be unable to pay its debts, according to a leading credit ratings agency. Fitch Ratings downgraded its view of the country's government debt, warning a default is "imminent". The move comes amid increasing international sanctions against Russia following its invasion of Ukraine. A credit rating is intended to help investors understand the level of risk they face in buying a country's debt - or bonds. A low rating means the chances of not getting repaid is considered to be high - and so an investor will charge more to lend to that country. This week, Moscow itself...

Fitch on Tuesday downgraded Russia’ssovereign rating by six notches further into the junk territory to ‘C’ from ‘B’, saying a debt default is imminent.

Russia’s currency sank to a record low Monday as traders struggled to get access to the ruble. The ruble fell to 137 to a dollar, a decline of more than 10% from Friday’s close, as traders say that the ability to buy and sell the Russian currency has become more limited as fewer banks want to settle transactions against it in the offshore market.

Russia said on Sunday that sovereign bond payments will depend on sanctions imposed by the West over the invasion of Ukraine, raising the spectre of its first major default on foreign bonds since the years following the 1917 Bolshevik revolution.

Russia suffered another body blow as its credit rating fell once again, this time hitting the second-lowest rung and putting the country in danger of default. Rating agency Moody’s set Russia’s rating to Ca, which indicates "severe concerns around Russia's willingness and ability to pay its debt obligations."

S&P Global slashed Russia’s credit rating on Friday for the second time in a week, stating that recent capital controls measures are increasingly likely to cause a default. The sovereign is now rated CCC-, for both its local-currency and dollar debt. That is two notches above a default level. A week ago, Russia was rated investment grade. The speed of its descent into the deepest levels of junk status is unprecedented, according to an S&P spokesperson.

Politicians are making the claim that if the United States Congress does not increase the debt ceiling next month the United States will default on its credit payments. This is not true. It will not happen unless the people in charge want it to. This is not hard to understand, and I will explain.Estimated US tax revenue for fiscal year 2021 is 3.863 trillion dollars. That amounts to a little over 321 billion dollar per month.In fiscal year 2020 the government spent 6.55 trillion dollars.These are the 10 biggest expenditures by category.Even when the debt limit is reached the government...

In two separate protests, mobs of China Evergrande Group customers and employees demonstrated this week as the world's largest developer faces soaring probabilities of default. According to Bloomberg, the first demonstration was held in Guangzhou as more than 100 homebuyers attended a demonstration in front of the Nansha district's housing bureau Thursday wearing shirts that read "Resume construction, Evergrande." Many of these customers are becoming increasingly angry as multiple large condominium projects have been halted for months, including the massive 5,000 apartment complex called Evergrande Peninsula since May. The developer is stuck between a rock and a hard place as...

Treasury Secretary Janet Yellen on Wednesday warned congressional leaders that the U.S. is on track to default on the national debt in October if the White House and Congress are unable to raise the debt limit. In a Wednesday letter, Yellen said that the Treasury Department would likely run out of cash and exhaust “extraordinary” measures to keep the federal government within its legal borrowing limit at some point next month. "Once all available measures and cash on hand are fully exhausted, the United States of America would be unable to meet its obligations for the first time in our...

The debt crisis of China’s state-owned enterprises (SOEs) has been deepening since 2020. Beijing has recently issued a report to address the issue as several SOEs have defaulted on loans in recent months. The State Council of China recently issued the report “The Guideline on Enhancing Debt Risk Control of Local State-owned Enterprises” on March 28. Beijing requires state-owned firms to create the following: a mechanism to identify and monitor debt; a mechanism to control debt; a mechanism to support the life cycle of a bond; and a long-term mechanism for debt risk management. In the same month when the...

This isn’t as much hyperbole as it sounds: the main reason investors bought bonds issued by Chinese state-backed companies is an implicit guarantee from default by the local or provincial government. That belief has been shattered by a recent spate of defaults by major Chinese state-owned companies. Yongcheng Coal and Electricity Holding Group, a state-owned coal company, defaulted on a $152m bond in November. At the time of the default, Yongcheng was a AAA-rated company by Chinese domestic credit rating agencies. This became, pun unintended, the proverbial canary in the coal mine. Shortly thereafter, Tsinghua Unigroup, a state-backed technology company...

With US Treasury yields capped around 0.90% amid concerns that in the absence of fiscal stimulus the Fed will need to step in with more easing (either in the form of extending QE maturities, or an outright expansion in QE), China is facing a different set of challenges and following the recent rout in the bond market following several unprecedented SOE defaults, overnight the Chinese 10Y yield rose another 2bps to 3.36%, and almost 90bps from the all time low of 2.48% hit in April.As a result, the premium for China’s 10-year government bonds over U.S. Treasuries of same duration...