- Russian lender Sovcombank PJSC canceled $5.81 million of interest accrued on one of its perpetual bonds.
- The rights and claims of bondholders over the canceled interest "shall become null and void," it said in a Monday regulatory filing.
- While other companies have made bond payments in rubles or have payments pending, Sovcombank is the first to cancel a payment, Bloomberg reports.
Russian lender Sovcombank PJSC canceled $5.81 million of interest accrued on one of its perpetual bonds, the first firm to make such a move as sanctions continue to impact creditors' ability to make debt payments, Bloomberg reported Monday.
The rights and claims of bondholders over the canceled interest "shall become null and void," it said in a Monday regulatory filing.
Sovcombank's move with its perpetual bond — a fixed income security without a maturity date — is uncommon among European banks.
The West's wartime sanctions have made it difficult for Russian companies to meet debt obligations, and many firms have had to pay in rubles, or have payments pending.
Sovcombank, Bloomberg reported, is the first borrower so far to cancel payments. Its perpetual notes, however, include a feature which allows the borrower to cancel some or all of the accrued interest before a coupon date arrives.
Moscow has made a series of maneuvers to keep the country's economy intact since Putin ordered the invasion of Ukraine. However, a Moscow broker said the calm being projected by Russian authorities is a facade, and that the markets are "completely artificial" right now.
Other moves meant to stave off economic turmoil include strict capital controls that have bolstered the ruble, and a a ban on foreign investors from shedding domestic assets.
The bond market in particular has taken a hit, the broker told Insider, and bargain hunters have flocked in hoping to profit from a rebound.
