Russia’s Small-Enough-to-Fail Starting to Default

International sanctions against Russia are starting to push some of the country’s smaller companies into default.

The failure by a UTair Aviation JSC unit to redeem bonds on Nov. 20 -- the second Russian default in as many weeks -- won’t be the last as companies dependent on domestic financing are squeezed by climbing interest rates and an economy on the brink of recession, according to Otkritie Asset Management and Kapital Asset Management. There may be as many as 10 corporate defaults by March 31, UralSib Capital analyst Nadezhda Bozhenko said.