Clearstream warns clients about blocking Russian Eurobonds – Kommersant
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International depository Clearstream announced a possible blocking of Eurobonds on accounts issued by Russian companies. The blocking applies to accounts for which issuers settle in alternative ways. Message on site depository appeared on June 1, the first to report it Vedomosti.
The innovation in the work of the depository is aimed at “avoiding double payments”. The message refers to the possible blocking of securities, in which case the blocking may occur – it is not specified.
Clearstream asks Russians to notify about alternative payments or the intention to credit them to an account with other depositories. Clients need to send a free-form message to Clearstream stating the identity of the security holders, amount, currency of the payment, and the date the payment was received.
Clearstream refers to alternative payment methods as partial or full payments for securities in Russian rubles, that is, a change in the payment currency; repurchase (buyback) of bonds; replacement of Eurobonds accounted for in the international depository with local Russian securities.
Kira Vinokurova, co-head of Pen&Paper’s Sanctions and Compliance practice, told Vedomosti that paying Eurobonds to an account with another depository could indeed lead to a repeat payment. In her opinion, the depository seeks to exclude possible violations related to the sanctions regime, since alternative payments may be perceived by it as a circumvention of the sanctions.
In June, Clearstream Banking announced it was suspending instructions to convert depositary receipts into Russian shares due to EU sanctions on Russia. Prior to this, Russia blocked the assets of Euroclear and Clearstream for €2.9 billion in the national settlement depository (NSD). The blocking occurred in response to the restrictions that Euroclear and Clearstream imposed on NSD, implementing European sanctions after the start of the Russian military operation in Ukraine.
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