S&P Global took Russia’s debt rating deeper into junk territory late Thursday, saying it considers the country’s bonds “highly vulnerable to nonpayment.” S&P rated it CC/C, from CCC-/C, and kept a negative outlook. S&P downgraded Russia’s debt twice since late February, reflecting concern about sanctions and other economic difficulties after Russia’s invasion of Ukraine. Investors appear to not have received a coupon payment on Russian government’s dollar-denominated Eurobonds when the payment was due on Wednesday, thanks to technical difficulties related to the sanctions, S&P said. There is a 30-day grace period on the relevant bonds, and recent Russian Ministry of Finance’s statements suggest that Russia is still attempting to transfer the payment to the bondholders. Other debt service payments on Russia’s Eurobonds due in the next weeks “may face similar technical difficulties,” S&P said. Some nonresident holders of Russia’s local-currency debt “might not be able to access debt service payments on those bonds in Russia, though so far the available information about this is incomplete,” the ratings agency said.
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