JPMorgan Processed Coupon Payment to Citigroup of Russian Sovereign Bonds

JPMorgan Chase & Co. has processed funds of coupon payments due on dollar bonds issued by the Russian government and has been sent to the Citigroup Inc. of amounting $117 million, accordion to Bloomberg.

JP Morgan processed the payment to Citigroup after soughing required approvals from the U.S. authorities, according to Bloomberg, citing people familiar with the matter.

However, European bondholders of Russian sovereign debt did not receive any funds yet while S&P Global Rating warned that the “technical difficulties” in getting the money to investors was increasing the risk of a default — either this time around or in the future.

Russian official said if the payment in dollar is blocked, they would process the payment in rubles. Russia has 30-day grace period to meet the payment obligations.

“If funds are not accessible for investors or if a payment is made in a currency not stipulated in the terms of the obligation and we believe that the investor does not agree to the alternative payment, we could deem this a default,” S&P analysts said in a statement, downgrading Russia’s foreign-currency rating to CC from CCC-.