U.S. unlikely to extend Russian debt payment licence, Treasurys Yellen says

div classBodysc17zpet90 cdBBJodivpBONN, Germany Reuters – The United States is unlikely to extend a soontoexpire licence that allows Russia to pay U.S. bondholders, Treasury Secretary Janet Yellen said on Wednesday, which could put Moscow closer to defaulting on its debt. p

pRussia has so far managed to make its international bond payments even though Western sanctions ban transactions with Russias finance ministry, central bank or national wealth fund.pdivdivdiv classBodysc17zpet90 cdBBJodiv

pThe country has 40 billion of international bonds and last month made what appeared to be a late Uturn by making payments to avoid a default.p

pBut Moscow now faces a May 25 deadline when the U.S. licence allowing it to make payments to U.S. bondholders is due to expire. p

pYellen, asked by reporters ahead of a G7 finance ministers meeting in Bonn if the United States would allow the licence to expire, said: “There‘s not been a final decision on that, but I think it’s unlikely that it would continue.” p

pYellen said: “If Russia is unable to find a way to make these payments, and they technically default on their debt, I don‘t think that really represents a significant change in Russia’s situation. Theyre already cut off from global capital markets.”p

pRussia has not defaulted on its external debt since the aftermath of its 1917 revolution and was rated investment grade up until its Feb. 24 invasion of Ukraine.p

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pp Reporting by David Lawder Writing by Rami Ayyub Editing by Chizu Nomiyama and Jane Merrimanp

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