Citi's Caution on Sanctions Threatens to Send More Russian Companies Into Default
- The bank has held up payments from several Russian corporates
- Grace periods for EuroChem, Chelpipe coupons expire this week
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Some of Russia’s largest companies are careening into default and Citigroup Inc. -- not an inability to pay off their debts -- is a big reason why.
As the largest provider of payment agency services to Russian businesses, and in some cases the correspondent bank, Citigroup plays a crucial role in ensuring that bondholders get their money. It’s been subjecting the payments to intense screenings as it tries to comply with the tangled web of sanctions imposed by the U.S., U.K. and European Union on Russian entities and individuals, prompting compliance work to stretch on for days, according to people familiar with the matter.