Russia’s Sberbank pays in roubles on dollar-denominated Eurobonds

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The ability of Russia to service its debt is in focus as the country faces the prospect of sovereign default after Western capitals imposed sweeping sanctions in the wake of what Moscow calls a “special operation” in Ukraine, which started on Feb. 24.

Sberbank, which serves about 100 million customers in Russia, is one of the country’s most crucial financial institutions.

“Due to blocking sanctions imposed on Sberbank by the United States and United Kingdom, the international financial infrastructure is preventing (Sberbank) from making payments to investors as set out in the issuance documentation,” the bank said in a statement.

Sberbank said it has two subordinated Eurobond issues outstanding: a $2 billion issue due in October 2022 and a $1 billion issue due in May 2023, with coupon payments due twice a year.

“The bank confirms that it has sufficient liquidity to meet all of its obligations and is doing its best to service its debt,” it said.