Russian Investors to Receive Belarusian Eurobond Payments Through NSD
The Central Bank of Russia has announced a new mechanism allowing Russian investors to obtain payments on Belarusian Eurobonds via the National Settlement Depository. The update, published on the bank’s website through TS RB, confirms a shift that enables ruble settlements and avoids routing payments through foreign institutions.
In the new arrangement, the Central Bank explains that payments on Belarusian Eurobonds will be processed in Belarusian rubles. The system will bypass foreign intermediaries and channel funds through the domestic settlement infrastructure, simplifying access for investors holding these securities.
To implement the payments, the National Settlement Institution will compile a list of holders eligible for redemption and forward it to the central depository in Belarus. This step ensures that all relevant records are aligned between the Russian and Belarusian markets, enabling a smooth transfer of funds once the redemption dates are confirmed.
Investors must verify their status as friendly holders, confirm their ownership of the security as of September 6, 2022, and verify the redemption date. Additionally, they are required to submit an application that waives any claims against the issuer, thereby completing the eligibility process for ruble-based payments.
On November 20, it was stated that the Ministry of Finance of the Russian Federation paid coupons on government bonds maturing in 2027 and 2032 in rubles. Previously, President Vladimir Putin approved a temporary procedure for meeting the debt obligations of the Russian Federation under Eurobonds. The document specifies obligations to both residents and foreign creditors and addresses securities accounted for by foreign depositories. These entities handle the custody of securities and the registration of rights to them, shaping the cross-border payment landscape for the bonds in question.
Economists have noted the potential impact of these steps on the currency landscape. There is speculation about a weakening of the dollar toward the end of the year, driven by shifts in debt servicing arrangements and the evolving framework for bond payments. While market participants monitor developments, the ongoing adjustments reflect changes in how cross-border fixed income instruments are managed between Russia and its partners.
In sum, the policy move creates a more localized flow of payments for Belarusian Eurobonds, backed by the domestic settlement infrastructure. Investors in Russia will see payments routed in rubles, reducing exposure to international payment rails and potentially simplifying tax and regulatory considerations. The precise process requires alignment between the Russian central bank, the National Settlement Depository, and the Belarusian central depository to ensure accurate, timely transfers based on verified ownership and redemption timelines. Market observers will continue to watch for updates on eligibility criteria, settlement dates, and any shifts in the operational framework that could influence liquidity and demand for the affected securities.
As the situation evolves, market participants are encouraged to stay informed about any adjustments to redemption schedules, currency risk, and regulatory requirements. The overarching goal remains to provide a reliable, transparent mechanism for investors to access income from Belarusian Eurobonds while leveraging domestic settlement infrastructure and maintaining clear, auditable records across both jurisdictions. Ongoing communications from the central banks and finance ministries will help clarify the operational details and timelines for affected holders.