Russian Credit Default Swaps Won’t Necessarily Be Triggered by Debt Payments in Rubles

Russia’s decision to pay some of its foreign creditors with rubles won’t necessarily constitute a credit event that would trigger $6 billion in derivatives contracts linked to the Kremlin’s creditworthiness, according to an industry body that presides over the credit default swap market.

The Kremlin announced last week that sovereign creditors based in countries that have imposed sanctions against it wouldn’t receive interest payments in the denominated currency of their debt contracts, but in rubles.