Gazprom Is Said to Make $1.3 Billion Debt Payment in Dollars1 min read

(Bloomberg) — Some holders of a $1.3 billion Gazprom PJSC bond due Monday said they received payment in dollars, even after Russian President Vladimir Putin gave issuers the option of repaying foreign-currency debt in rubles.

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Bondholders said they received cash to pay off the bonds Monday, according to the people with knowledge of the payments, who declined to be identified because they aren’t authorized to speak publicly about the matter. A spokesperson for the company didn’t immediately respond to requests for comment.

Although the company last week was already in the process of servicing the dollar debt maturity and a coupon payment on another bond, there was growing concern that a Saturday decree from Putin allowing borrowers to repay their debt in rubles would disrupt the payment. It underscores just how uncertain investors have been since Russia’s invasion of Ukraine prompted the U.S. and its allies to slap multiple sanctions on Moscow, and Moscow’s numerous capital controls introduced within the past two weeks.

Adding to the confusion, Russia has also said creditors in countries that haven’t imposed sanctions may be able to receive the payment in foreign currency, provided companies get special permission. The countries deemed “unfriendly” include the U.S., the U.K., Japan and European Union members. Bloomberg spoke to bondholders based in the EU.

It’s possible, however, that Gazprom’s payment process was too far gone to be impacted by Putin’s recent directives. The payment was meant to be transferred to bondholders by the settlement bank on March 4, a day before Putin’s decree. While the bonds are Gazprom’s, they were issued by Gaz Capital SA, a special purpose vehicle incorporated in Luxembourg.

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