EXPLAINER: What would a Russian bond default mean?

Ratings agencies say Russia is on the verge of defaulting on government bonds following its invasion of Ukraine, with billions of dollars owed to foreigners. Ratings agencies have downgraded Russia’s credit rating to below investment grade, or “junk.” Fitch rates Russia “C,” meaning in Fitch’s view “a sovereign default is imminent.” WHAT DOES THE FINE PRINT SAY? That could be fought out in court.” Ratings agency Moody’s says that “all else being equal,” payment in rubles on bonds that don’t permit would be “a default under our definition.” “However, we would need to understand the facts and circumstances of particular transactions before making a default determination,” it said. This time, however, “it’s hard to say ahead of time 100%, because every sovereign default is different and the global effects would only be seen once it has happened,” said Daniel Lenz, head of euro rates strategy at DK Bank in Frankfurt, Germany. IMF head Georgieva said that while the war has devastating consequences in terms of human suffering, and has wide-ranging economic impact in terms of higher energy and food prices, a default by itself would be “definitely not systemically relevant” in terms of risks for banks around the world.