LONDON (Reuters) -A credit derivatives committee will meet on Friday to discuss whether a "credit event" occurred after Russia made payments on its sovereign debt but failed to add interest accrued during the payment's grace period.
Overseas holders of a Russian sovereign bond that matured last month are seeking a ruling on whether $1.9 million in interest arrears constituted a "credit event" that might allow them to eventually collect a payout on default insurance.
The EMEA Credit Derivatives Determinations Committee (CDDC) said on its website on Thursday that holders of the 2022 bond had sent a notice through Euroclear, one of the world's biggest settlement systems for stock and bond trades, "demanding the payment of approximately $1.9 million".
They had asked if a "pay credit event" occurred on the unpaid accrued interest and the committee later said it had accepted the request.
The committee will meet on Friday at 1100 UTC to discuss the issue, it said on its website.
"The bonds matured on April 4, 2022 but the payment of principal and interest due at maturity was not made until May 2," the holder's query added.
The notice through Euroclear was sent mid-May.
Russia had paid nearly $650 million, which included the maturing bond, during a grace period, warranting potential interest arrears.
But default on other debt now looks inevitable according to some investors, after the U.S. Treasury chose this week not to extend a license that had allowed creditors to receive payments from Russia despite financial sanctions.
There are currently $2.54 billion of net notional credit default swaps (CDS) outstanding in relation to Russia, including $1.68 billion on the country itself and the remainder on the CDX.EM index, according to JPMorgan (NYSE:JPM) calculations.