JPMorgan processed Russia bond payments, sent money to Citigroup

JPMorgan Chase has processed funds that were earmarked for interest payments due on dollar bonds held by the Russian government and sent the money on to Citigroup, according to people familiar with the matter.

JPMorgan was the correspondent bank Russia used to send the payment to Citigroup, which is acting as payment agent on the bonds, the people said, asking not to be identified discussing a private matter. JPMorgan sent the money to Citigroup after it sought and received the required approvals from US authorities on Wednesday, one of the people said.

Representatives for JPMorgan and Citigroup declined to comment. 

Russia’s ability to make payments to bondholders on its debt is being closely watched by markets around the world. The Russian Finance Ministry said it had sent the order for a $117 million (€105 million) interest payment on 14 March to a correspondent bank that it didn’t identify, adding that it would issue a separate comment about whether the paying agent, Citibank’s London branch, has received the payment. 

The ministry has said it would first try to make the payments in dollars and then use rubles if that fails. So far, bondholders in Europe have received no sign of the funds.

As a correspondent bank, JPMorgan is authorised to provide services on behalf of another financial institution. In its role as payment agent, New York-based Citigroup collects coupon payments from bond issuers and distributes those funds to investors. They are largely back-office roles. 

©2022 Bloomberg L.P.

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