The Central Bank recommended that issuers of Eurobonds exchange them for replacement bonds
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The Bank of Russia recommended that financial market participants use the mechanism of replacement bonds to fulfill obligations under Eurobonds. This follows from information letter regulator.
“In order to ensure the rights and legitimate interests of Eurobond holders, the Bank of Russia recommends that financial market participants with obligations associated with Eurobonds, primarily having the opportunity to make changes to the issuance documentation of the relevant Eurobonds, use the mechanism of replacement bonds to fulfill these obligations,” the statement says. document.
The placement of replacement bonds allows you to fulfill obligations in a situation where the holder of Eurobonds cannot dispose of them. “In addition, anti-sanction regulation provides for a simplified procedure for issuing replacement bonds,” the Central Bank explains.
The replacement bonds should be denominated in a currency similar to that of Eurobonds, the regulator said. However, in order to reduce the risks of blocking operations, the Bank of Russia recommends that settlements related to the issuance of replacement bonds be made in Russian rubles.
In summer, holders of Russian Eurobonds purchased through foreign banks faced with problems receiving coupon payments. At the same time, the Belgian depositary and clearing company Euroclear created for holders of Russian “default” Eurobonds, separate sub-accounts for recording income, and the Russian authorities identified temporary procedure for payments on sovereign Eurobonds. Special accounts are opened in the central depository for both Russian investors and foreign depositories.
Read more in the publication “Kommersant” “Bond is looking for an understudy”.
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