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Russia’s Credit Risk Surges as Putin’s Demands Renew Default Fears

  • Credit swaps signal 87% chance of default within five years
  • Concerns about gas supply follow several dollar bond payments
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Risk of Russian Default is High: IIF's Ribakova

The cost of insuring Russian debt surged on Thursday after President Vladimir Putin demanded ruble payments from “unfriendly” nations for gas purchases.

Credit-default swaps protecting $10 million of the government’s bonds for five years were quoted at about $6.4 million upfront and $100,000 annually, according to ICE Data Services. That implies an 87% probability of default, compared with about 60% at the end of last week.