VTB, which came under Western sanctions in February, paid the holders of one of the bank's four Eurobond issues a coupon for $52 million in rubles, although the issues of these securities were made in foreign currency, which means that the payment will most likely not be accepted.. The payment in rubles is reported by the Russian edition of Vedomosti, citing Dmitry Pyanov, a member of the VTB board..

The bank made payments on April 15 in the amount of 4.2 billion rubles. This is one of four issues of VTB Eurobonds made before 2014, since after the annexation of Ukrainian Crimea by Russia, sectoral sanctions prohibited VTB from issuing long currency bonds.

Of these securities, three were issued in dollars and one in Swiss francs.. Now the sanctioned VTB came under blocking sanctions and was completely cut off from the foreign payment infrastructure in dollars, therefore it cannot make payments in foreign currency.

The payment was divided into two tranches for countries that support the aggressor and those that imposed sanctions on him because of the war against Ukraine. Counterparties from the second group received a payment not only in rubles, but also blocked.

VTB also wants to pay the remaining Eurobonds. At the same time, issues paid in a currency not stipulated by the contract are considered not redeemed, and then will lead to the issuer's default.

Recall that on April 16, the Russian Agricultural Bank (RSHB), which is under sanctions, was unable to pay the coupon on dollar Eurobonds on time..

Earlier, another bank, Sovcombank, which is under US sanctions, announced that the imposed restrictions do not allow it to service debt obligations, in particular, pay coupons on four issues of Eurobonds..

Bank defaults on external obligations mean a return to the local, domestic, financial market, not connected with the international financial system. The channel of Russia's foreign exchange earnings will constantly decline and will be associated only with the export of raw materials.

Due to sanctions, banks will lose the ability to finance economic growth and the economy using foreign exchange instruments.

Tensions are expected over how obligations on foreign currency deposits will be fulfilled. Most likely, banks will offer Russian depositors to convert foreign currency deposits into rubles.

It is also known that the Central Bank of Russia, in order to maintain the liquidity of banks, expanded the pawn list for repo transactions several times (the Central Bank uses this mechanism for short-term loans to banks secured by securities). At the same time, bank loans amounted to trillions of rubles.