The company must repay the debt in dollars.
Not that Severstal had no money (only $ 12.6 million), but that Citibank's payment agent refused the payment due to sanctions against the company's owner, Alexei Mordashov. The company is looking for an alternative to avoid default, the Russian media write.
Failure to pay the coupon (or blocking the payment by the paying agent) is fraught with default on bonds, and then cross-default on all debts of the company. And after that all debts become urgent to repay. By the way, the total debt of “Severstal” on December 31, 2021 amounted to $ 1.8 billion.
Therefore, companies urgently need to find an alternative. Many Russian companies, which previously used the borrowed funds, now need to look for an alternative. Plus it is not a fact that the found alternative will suit those who imposed sanctions against Russia and they, in turn, will not come up with their own alternative.
Read also: JPMorgan received a payment on Russian government bonds in dollars, not rubles
It will be recalled that today Putin announced that Russia will soon switch to paying for gas supplies to unfriendly countries in rubles. He instructed the Central Bank, the government and Gazprom's director on operations and contracts with Europe. As a result, gas prices in Europe rose immediately and the ruble strengthened. This is evidenced by the results of the auction.
