Page 133 - RusRPTJul22

8.5.1 Fixed income - bond news
On May 31, the CDS Determination Committee ruled that Russia allowed a "non-payment event" on Eurobonds. It is tantamount to recognizing a default for the purposes of paying out credit default swaps (CDS), i.e. insurance against default. But this is not yet a "complete" default.
The Russian Ministry of Finance transferred the payment on Russia-2022 dollar Eurobonds worth $522mn with maturity on April 4 at the very end of the 30-day grace period, but $1.9mn of interest accrued during this time was not. This is what gave the holders a reason to file a notice of default, and the committee to announce non-payment. The decision of the committee (it includes buy-side and sell-side companies, including Goldman Sachs, Barclays and JPMorgan Chase) starts the auction process, which results in payments from sellers to CDS buyers.
The main thing you need to know is that this will not entail a cross-default in Russia, writes Bloomberg. CDS cover not a very large part of the Russian debt - about $3.2bn (FT, referring to JPMorgan, writes about $2.5bn). For a cross-default on other obligations to occur, about $75mn had to be left unpaid, the agency calculated.
Yandex has agreed with holders of convertible bonds on a new extension of the term for requiring early redemption of securities - now until July 6. After a freeze in early March of trading in shares of Russian companies in the United States, Yandex warned investors about the risk of default: if trading stops for more than five days, holders of all bonds issued by the company can demand redemption. This means that the company may need about $1.25bn at a time, which it does not have. The news means that Yandex's investors are still constructive. Read more about what is happening in the company, we told here.
Mobile TeleSystems Public Joint Stock Company (MTS) Russia’s largest mobile operator and a leading provider of media and digital services, announces that it has completed the book building of its RUB 10 bn series 001P-21 exchange-traded bonds with a maturity of four years and a coupon rate of 9.65%. The nominal price of the bonds is set at RUB 1,000, the coupon period at 91 days, and the price of placement at 100% of the nominal value. The book building, which took place on June 17, saw robust demand, with about 60 orders from a wide range of investors, including banks; investment, asset management and insurance companies; non-state pension funds; and retail investors. As a result, the bid book was six times oversubscribed, and the coupon was reduced three times, from an initial rate of 10.20% to a final fixed rate of 9.65%.
133 RUSSIA Country Report October 2020 www.intellinews.com