US tightens ban on Russian debt, JP Morgan and Goldman Sachs put a stop to it
The invasion of Ukraine drove the Russian prices plunging
Elizabeth Warren enraged by firms’ continued trade
US Treasury issued a surprising update in guidelines
Russia’s foreign bonds trading at roughly 20 cents on the dollar
Following the Biden administration’s surprising revelation last week that US investors would be prohibited from buying Russian debt, two major Wall Street banks are pulling out of the market.
According to market experts, JP Morgan Chase & Co. and Goldman Sachs Group Inc. were still linking sellers looking to get out of debts with prospective purchasers this month. JPMorgan is now pulling back after the US Treasury’s Office of Foreign Assets Control ruled
US investors aren’t allowed to buy them, according to a source familiar with the issue.
Goldman Sachs has also halted such deals, according to a spokeswoman.
Earlier US laws had allowed trading houses such as Goldman Sachs and JPMorgan to assist clients in snagging inexpensive Russian debt on the secondary market as many holders sought to dump their holdings. Purchases of new and existing debt and equity instruments issued by a Russian Federation firm are now restricted by US market players.
Even if Russia-linked bonds were not subject to international sanctions, the invasion of Ukraine first drove their prices plunging. The ongoing trade of such securities quickly became a divisive issue on Wall Street and in Washington, with Senator Elizabeth Warren accusing banks of undermining sanctions.
Russia’s foreign bonds are currently trading at roughly 20 cents on the dollar, with some as low as 17 cents.
