Here’s How Messy a Russian Bond Default Could Be
Odd Lots
Bloomberg
4.5 • 2K Ratings
🗓️ 21 March 2022
⏱️ 50 minutes
🧾️ Download transcript
Summary
There’s a big question over whether Russia will be able (or willing) to make payments on billions of dollars it’s borrowed from investors given its current situation. Not only does the country have a history of previous major defaults, but some of its outstanding bonds are also structured kind of strangely. On this episode of the Odd Lots podcast, Tracy Alloway and Joe Weisenthal speak with University of Virginia law professor Mitu Gulati and University of North Carolina's Mark Weidemaier. They describe how odd some Russian bonds are and what might happen after default.
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Transcript
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| 0:49.2 | Hello and welcome to another episode of the Adlots podcast. I'm Tracy Alloway. |
| 0:53.6 | And I'm Joe Wyzenthal. |
| 0:55.2 | Joe, did you know that I have a sort of side hobby in the history of Russian debt? |
| 1:03.2 | I thought it was Chinese debt. |
| 1:05.0 | It's both actually. They kind of fit together for reasons that I could tell you about much later on. |
| 1:12.5 | But it's a really interesting topic all around. And throughout history, Russian debt has, |
| 1:19.2 | for at least a couple of times, burst into the public consciousness the first time in the early |
| 1:25.3 | 1900s with the 1918 default on Zara's imperial bonds. And then in 1998, with another, |
| 1:35.0 | I think it was a near default end on Brady bonds that were issued by Russia. |
| 1:41.0 | And now we're in another moment where it seems like everyone's going to be talking about |
| 1:46.4 | Russian debt yet again. Are there other holders of those early 1900 bonds who are in some obscure |
| 1:52.4 | courts somewhere trying to collect? There are a lot of investors who throughout the years have |
| 1:58.0 | tried to collect on Zara's imperial debt. Yes. But we have to talk about what's happening right now. |
| 2:04.4 | Yes. Which could also lead to a protracted series of litigation in various courts. |
| 2:12.2 | But we're recording this on Wednesday, March 16th. And it is the day that Russia |
| 2:17.3 | is supposed to be paying about $117 million worth of interest on two dollar bonds. And the question |
| 2:25.4 | is not only is it going to be able to pay those bonds, but what happens on other types of bonds? |
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