Russia's ministry of finance said on Friday that it had paid $71.23 million for a 2026 dollar bond and €26.5 million ($28.2 million) on a 2036 eurobond. The payments were made after the U.S. Treasury warned it might not renew the key license that allows Moscow to pay its debts, independent Russian newswire Interfax has reported.
The Russian ministry said it now considers all the Kremlin's obligations to have been completely fulfilled.
The ministry's website is currently inaccessible from countries classified by Moscow as "unfriendly," which include Britain, the U.S. and member states of the European Union.
The Office of Foreign Assets Control in the U.S. issued General License 9A in March to allow American investors to receive "interest, dividend or maturity payments" on Russian government bonds until Wednesday. The license is set to expire that day.
"We created an exemption that would allow for a period of time for an orderly transition to take place," Treasury Secretary Janet Yellen told a press conference last Wednesday.
Yellen said the Treasury saw this exemption period as "time-limited" and that it was intended to allow investors to sell their Russian government-linked securities.
"I think it's reasonably likely that the license will be allowed to expire," Yellen added. "There has not been a final decision on that, but I think it's unlikely that it would continue."
Russia has faced the possibility of defaulting on its debt since it invaded Ukraine in February. Sanctions prevent state bodies and companies from making bond payments, forcing the country into technical defaults.
The country previously risked defaulting after it paid $649.2 million in rubles on dollar eurobonds after being blocked by sanctions. That led to speculation that it was about to default. A European debt committee classed this as a "Potential Failure to Pay," meaning that Russia would have defaulted if it did not attempt to make up the payment with its domestic dollar reserves.
The Kremlin later made the payment in dollars, narrowly averting a default and preventing payouts for investors holding Russian government bond derivatives.
The state-owned railway operator RZD OAO became the first Russian company to default on its debts in April after its payments on Swiss franc debt instruments were blocked by sanctions.
Russia's central bank said this month that it would relax capital controls after its initial response to sanctions seemed to ease the economic pain of sanctions.
--Editing by Joe Millis.
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