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. Last Updated: 07/27/2016

Decision on Soviet Debt Expected by June 15




Russia expects foreign creditors to decide by June 15 whether to reschedule missed payments on Soviet-era debt, local agencies quoted First Deputy Prime Minister Viktor Khristenko as saying Monday.


Khristenko, the government's new financial policy chief, told journalists the situation at debt talks was "favorable" and it was premature and incorrect to talk of Russian default this autumn, the agencies reported.


"We have not received any signals about that and hope that we will succeed in restructuring the debt of the former Soviet Union," Interfax quoted him as saying.


Russia wants to resolve the payment of $855 million of debt to the so-called London Club of commercial creditors, missed June 2.


"The government of the Russian Federation expects a decision before June 15 on whether the West will accept Russian conditions for restructuring this debt," Interfax said, without directly quoting Khristenko.


Russia has asked creditors for six months to make the payment, although some U.S. investors holding some of the debt, known as principal notes, or PRINs, and interest arrears notes, or IANs, have threatened to go to court to get paid.


Russia has virtually no chance of paying $17.5 billion in foreign debt due this year without new financial support from the International Monetary Fund and others.


The debt is almost equal to the federal government's total annual revenues.


Agencies quoted Khristenko as saying quick approval by the IMF of a new credit depended on parliament passing four bills by July aimed at increasing budget revenues by eight billion rubles ($325.1 million).


The IMF's board could delay until September consideration of a new 18-month $4.5 billion credit for Russia if the bills did not pass on schedule, Khristenko said.