Russia Says Eurobond Coupon Paid to Correspondent Bank

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Russia’s Finance Ministry said a $117 million interest payment due on two dollar bonds had been made to its foreign correspondent bank amid mounting speculation that the country is heading for a default.

The ministry said it will comment separately later on whether the payment had been credited to Citibank in London, Russia’s eurobond payment agent.

Russia had until the end of business Wednesday to honor the coupons on the two notes. If it doesn’t do so within the grace period, that would be the first time the nation has reneged on its obligations to foreign creditors since the Bolsheviks repudiated the czar’s debts in 1918.

Finance Minister Anton Siluanov has repeatedly warned that without access to its foreign reserves, Russia will make the payment in rubles, outlining a process that involves transferring the cash into local accounts. Fitch Ratings said on Tuesday that making a settlement in any currency other than the dollar within the grace period would be considered a default. S&P Global Ratings made a similar statement earlier this month.