Russia Settles USSR's Debt to London Club

Russia Settles USSR's Debt to London Club

Russia has finally paid off the debt to the London Club of Creditors. Russia has thus paid the entire debt of the former Soviet Union to private-owned commerce banks in Western Europe, the USA and Japan. The debt appeared as a result of the loans, which the USSR’s Vnesheconombank (Foreign Economic Bank) raised in the above-mentioned countries before December 31, 1991.

The debt had been evaluated at tens of billions of dollars by the beginning of the 2000s, but it was successfully restructured. The swap in the amount of $31.7 billion to Eurobonds became a landmark financial event, Money Times wrote.

After the 1998 financial crisis, Russia ran into difficulties with its debt service and in 2000 agreed a second restructuring with the London Club, under which PRINs and IANs were swapped for Russia's sovereign Eurobonds worth $31.7 billion with maturities in 2010 and 2030.

Overall, the Finance Ministry has made four debt swap offers, which have been accepted by 99.9% of creditors, RIA Novosti said.

In August of 2009, the Russian government supported the Finance Ministry’s Initiative to finally solve the debt issue with the London Club. It also became clear that the Russian Federation would enter the market of foreign loans again.