Page 109 - RusRPTSept22

Russia. Once started the legal wrangling could go on for years, if not decades.
An interesting twist is that the Kremlin may offer these bond holders to settle in rubles, meeting the full value of the principle plus interest and some investors will be tempted to take the deal as otherwise they may never get their money back.
8.5 Fixed income
The Moscow Exchange (MOEX) allowed non-residents from ‘friendly’ countries as well as foreign companies whose ultimate beneficiaries are Russian to trade on the domestic bond markets again from August 15. Trading on Russia’s exchange was shut down as soon as the war started and foreign investors were prevented from withdrawing their money as one of the Central Bank of Russia's (CBR's) many capital controls to preserve its stock of foreign exchange. Trading in stocks and bonds for locals was restarted after a few weeks, but until now the ban on foreign activity remains in place. However, as the situation normalises the CBR has been easing controls, partly in an effort to weaken the ruble, which has strengthened dramatically in the last two months. The permission for investors from “friendly” countries is another step along the same road as the bulk of foreign investors in MOEX are from “unfriendly” countries in the West. Any selling by “friendly” foreign investors will not amount to a large amount of capital flight. The new easing of the rules applies only to the domestic bond market. No information on what restrictions on the equity market were released.
The share of non-resident Russian Eurobond holders decreased by 0.2 percentage points in April–June to 49.6% as of July 1, as seen by PRIME in the central bank’s materials on August 10. Investment of non-residents in Russian Eurobonds amounted to $18.035bn as of July 1.
109 RUSSIA Country Report September 2022 www.intellinews.com