Russian sovereign bond payment received by JPMorgan and processed

NEW YORK (Reuters): Coupon payments on Russian sovereign bonds due this week were received by correspondent bank JPMorgan (JPM.N), processed and the bank then made an onwards credit to the paying agent Citi (C.N), a source familiar with the situation said on Thursday.

The payment received was a U.S. dollar payment, the source said. After being credited to the paying agent, it would be checked and distributed on to various bondholders, the source said.

Russia said on Thursday it had made debt payments that were due this week. Russia was due to pay $117 million in coupon payments on Wednesday on two dollar-denominated sovereign bonds.

The payments were widely seen as the first test of whether Moscow would meet its obligations after Western sanctions hobbled its financial dealings.

The source said that JPMorgan’s obligation as a foreign correspondent bank was to process payments, but that given the circumstances, also to check with authorities before doing so.

Sanctions imposed over Moscow’s invasion of Ukraine have cut Russia off from the global financial system and blocked the bulk of its gold and foreign exchange reserves, while Moscow has in turn retaliated – all of which complicate payments.
The bank checked with authorities before processing, the source said. Not to process the payment would have harmed bondholders, the source said.