Putin approved the procedure for payments on Eurobonds – Kommersant

Russian President Vladimir Putin signed a decree on September 9 approved a temporary procedure for the execution of debt obligations under Eurobonds. Document published on the legal information website.

The decree spells out the implementation of settlements: the Russian Federation sends an application to the Russian depositary to open an “I” type account in rubles in the name of a foreign bond holder. In this case, an account can be opened in the name of several foreign depositories at once.

Next, the Russian depository transfers payments to Eurobond holders, whose rights are taken into account by the settlement institution itself or its depositors. In this case, the transfer of payments in foreign currency will be carried out at the expense of funds in the currency in which the obligations under the Eurobonds are expressed.

The non-bank credit organization will also transfer payments to depositories where accounts for Russian Eurobonds are opened. The Central Depository is recognized as having fulfilled its obligations from the moment it submits an order to the foreign depository to transfer funds in foreign currency.

The transfer of payments will be made in rubles in an amount equal to the amount of obligations in foreign currency. The amount of payments is calculated at the rate at which the central depository received funds in rubles.

Eurobond holders will receive payments through credit organizations, a list of which will be compiled by the Russian government. The document also stipulates the conditions under which security holders will receive payments:

• the holder of the securities must not be a depositor of a foreign depositary;
• the payment amount must be reduced by the amount of payments credited to accounts of type “I” earlier.

According to the decree, the government, within 10 days after the publication of the decree, is obliged to determine the list of organizations responsible for receiving documents confirming the rights of Eurobond holders to own securities. The government should also compile a list of Russian credit institutions that will transfer payments to security holders.

Within the same period, the Ministry of Finance is obliged to establish a procedure for:

• determination of beneficiaries for accounts of type “I”;
• indexation of amounts credited to these accounts;
• determine the amount of payments to security holders;
• payments by the central depository of funds to foreign depositories and Eurobond holders.

The department is also responsible for the list of documents confirming the rights of Eurobond holders to own securities.

Within the same ten days, the Board of Directors of the Central Bank is obliged to establish the “I” account mode, as well as the procedure and terms for the provision of information by Russian depositories to foreign financial institutions.

Polina Motyzlevskaya