Understand the impact of the Ukraine conflict from a cross-sector perspective with the GlobalData Executive Briefing: Ukraine Conflict


A derivatives panel has ruled that state-owned Russian Railways is in default after failing to make a bond interest payment as international sanctions put strains on the domestic economy.

Credit Derivatives Determinations Committee (CDDC) noted that a ‘failure to pay’ credit event linked to Russian Railways has occurred after a coupon due last month did not reach the investors following the ten-day grace period, Bloomberg reported.  

According to the report, Russian Railways tried paying the bond coupon last month. However, the holders did not receive it due to ‘legal and regulatory compliance obligations within the correspondent banking network’.

Several countries imposed harsh sanctions on Russia after it invaded neighbouring Ukraine in February 2022. Moscow terms its action in Ukraine as a ‘special military operation’.

The legal implications of the sanctions have persuaded Western banks and other financial intermediaries to block bond payments, thereby increasing difficulties for Russian borrowers to make transactions, Bloomberg added.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

The CDDC decision will not have a direct impact on bond investors.

However, this is the first time a Russian debt instrument was classified as defaulted since the beginning of the invasion.

Separately, Reuters reported that Russian Finance Minister Anton Siluanov warned that it may take legal action if the Western countries forces it to default on sovereign debt.

Russian Railways manages infrastructure, as well as operates passenger and cargo services in the country.

Recently, a missile strike on an eastern Ukrainian railway station killed at least 39 people and injured nearly a hundred as the conflict enters seventh week.