Sberbank said it has made coupon payments in rubles on eurobonds with Russia's National Settlement Depository, and expects the payments to be sent to bond owners. The bank did not specify when bondholders would receive their due payments.
The bank said it had done this to comply with President Vladimir Putin's executive order in early March that allowed Russian companies to make ruble coupon payments on bonds if they are denominated in foreign currencies. This is seen as an attempt to protect the Russian market's stability and creditors' interests.
"Amid the blocking sanctions that the U.S. and U.K. imposed against Sberbank, the international financial infrastructure prevents the bank from making payments to investors in accordance with the bond issue documentation," the bank said on its website.
Sberbank also said it has two outstanding subordinated eurobond issues both requiring biannual coupon payments. A $2 billion issue is due in October 2022, and a $1 billion issue is due in May 2023.
The bank was hit by Western sanctions when Russia's armed forces swept across Ukraine's borders in late February, causing its European arm to collapse in March. The British government imposed its most severe restrictions on the bank in April by freezing all its U.K. assets.
The White House placed "severe and immediate economic costs" on Russia in April after evidence of war crimes was uncovered in Ukraine, freezing Sberbank's assets and banning Americans from interacting with it.
The U.K.'s foreign secretary, Liz Truss, called earlier this month for professional services firms to cut off ties to Russian banks and companies in an attempt to ratchet up sanctions on Russia over the invasion of Ukraine.
The Kremlin has responded by building a wall between Russia and the global economy, calling for companies to withdraw their depositary receipts from foreign stock exchanges and restricting residents' transactions with foreign bank accounts.
But Washington forced Moscow's hand on Friday when Russia's finance ministry made early payments on bonds because a key sanctions exemption license was due to lapse.
Sanctions have also restricted the Russian central bank's access to $630 billion in foreign currency reserves held abroad.
--Editing by Joe Millis.
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