Western Banks To Russia: All Is Forgiven

They were burned by the 1998 debt default, but they're back

To hear Western investment bankers talk about Russian debt today, you'd never guess that barely two years ago most fled Moscow after a bad mauling. Russia had defaulted on domestic debt, devalued the ruble, and frozen payments on some Soviet-era commercial debt. The price of a 30-year Eurobond issued just before the crisis plunged to 15 cents on the dollar, and the markets dried up. The U.S. and European banks, which lost some $10 billion to the debt default alone, cried highway robbery and vowed never to go near Russia again.

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