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Important Information on Payments
Due to current restrictions on payments by foreign counterparties, the Ministry of Finance of the Russian Federation has established a new payment procedure for state securities with nominal value stated in foreign currency (hereinafter – Russian Federation Eurobonds). The new procedure is set forth in Presidential Decree of the Russian Federation dated September 9, 2023 No. 665 “On the Temporary Procedure for Fulfillment to Residents and Foreign Creditors of State Obligations of the Russian Federation Expressed in State Securities with Nominal Value Stated in Foreign Currency, and Other Obligations on Foreign Securities” (hereinafter – Decree No. 665).
The previously applicable Presidential Decree of the Russian Federation dated June 22, 2022 No. 394 has ceased to be in force (hereinafter – Decree No. 394).
The procedure for transferring payments to depositaries of the Central Depository and Russian depositories, which have Russian Federation Eurobonds recorded on their accounts, including third-party rights accounts, at foreign depositories and have provided the Central Depository with information about such Eurobonds within the timeframe specified in the Central Depository’s request, remains unchanged compared to the procedure established by Decree No. 394.
The transfer of payments to beneficial owners of Type “I” bank accounts (i.e., holders of Russian Federation Eurobonds whose rights are recorded in foreign depositories) and to Russian depositories, which have Russian Federation Eurobonds recorded on their accounts, including third-party rights accounts, at foreign depositories but have NOT provided the Central Depository with information about such Eurobonds within the timeframe specified in the Central Depository’s request, is carried out under the new algorithm established by Decree No. 665.
Payments shall be transferred by the Central Depository by November 24, 2023 inclusive to holders of Russian Federation Eurobonds included in the register of holders of Russian Federation Eurobonds by November 23, 2023, and to Russian depositories that have provided the Central Depository with information upon its request regarding the total quantity of Russian Federation Eurobonds, in rubles in the amount calculated on the date of their transfer to the holder in accordance with the indexing procedure established by subparagraph “g” of paragraph 1 of Decree No. 365;
From November 25 to December 14, 2023, indexing of funds shall not be carried out, and payments shall not be transferred from said accounts;
On December 14, 2023, the Central Depository’s obligation to transfer payments in rubles from Type “I” accounts shall be replaced by the Central Depository’s obligation to transfer payments in foreign currency. The replacement procedure shall be established by the Ministry of Finance of the Russian Federation. From December 15, 2023, payments shall be made in foreign currency in accordance with paragraph 7 of Decree No. 665.
Payments shall be transferred on the 91st day following the date of the next installment in rubles in the amount calculated on the payment date in accordance with the indexing procedure established under subparagraph “e” of paragraph 1 of Decree No. 665, to holders of Russian Federation Eurobonds that have provided the Central Depository with confirming documents within 60 days after the date of the next installment on Russian Federation Eurobonds and have been included in the register of holders of Russian Federation Eurobonds by the Central Depository within 90 days after the date of the next installment, and to Russian depositories that have provided the Central Depository with information upon its request regarding the total quantity of Russian Federation Eurobonds, after expiration of the timeframe established by the Central Depository (subparagraph “a” of paragraph 9 of Decree No. 665).
Indexing shall be carried out using the exchange rate set by the Central Bank of the Russian Federation on the 91st day following the date of the next installment on Russian Federation Eurobonds, as determined by the prospectus. The procedure for such indexing shall be established by the Ministry of Finance of the Russian Federation in coordination with the Central Bank of the Russian Federation (subparagraph “e” of paragraph 1 of Decree No. 665);
On the 91st day following the date of the next installment, the Central Depository’s obligation to transfer payments in rubles from Type “I” accounts shall be replaced by the Central Depository’s obligation to transfer payments in foreign currency. The replacement procedure shall be established by the Ministry of Finance of the Russian Federation (subparagraph “b” of paragraph 9 of Decree No. 665). Thereafter, payments to persons who are beneficial owners of Type “I” bank accounts, to whom payments were not transferred on the 91st day as described above, shall be made in foreign currency from funds held in the Central Depository’s accounts at foreign depositories.
The full List of documents submitted by holders of Russian Federation Eurobonds to NSD (with and without submission of a Foreign Depository List) is posted on the NSD website.
Document review takes up to 10 business days. If, upon completion of the review, NSD has no doubts regarding the sufficiency of the documents, NSD will process payments in the Russian ruble or in foreign currency in accordance with the Decree.
If the foreign depository provides NSD with information about you and your Eurobonds, the payment will be sent to your bank account as specified in the foreign depository's disclosure.
If the foreign depository does not provide NSD with information about you and your Eurobonds, the payment will be sent to the details you specify in your payment application. Payments may only be made to a personal account in the corresponding currency; therefore, if you do not have one, you will need to open one.
Regulatory and informational documents regarding the new procedure for paying income on Russian Federation Eurobonds: