WASHINGTON (Reuters) -The U.S. Treasury issued a special waiver on Friday to allow investors with insurance against a Russian default, known as Credit Default Swaps, to receive their payouts.
The normally straightforward process of CDS payouts was thrown into chaos in June when Washington said its sanctions on Russia represented a total ban on buying Moscow’s debt.
An investor who buys a CDS contract usually hands over the underlying bond to the bank or fund that sold them the CDS when a default happens. It traditionally involves an auction to determine the price, but under the sanctions that exchange effectively became illegal.
The license authorizes U.S. persons to purchase or receive Russian bonds starting two days before the announced date of the auction, and up to eight business days after the auction takes place.
The committee that sets the auction date has a scheduled meeting on Monday at 1300 GMT after having met three times this week.
“OFAC has issued two General Licenses (waivers) to help U.S. and other global investors more cleanly exit their exposures to Russia,” a Treasury spokesperson said, referring to the Office of Foreign Assets Control which enforces U.S. sanctions.
The move also authorizes financial