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16 March 2022

Overseas investors have billions of dollars worth of bonds trapped in Russia

The American fund managers BlackRock and PIMCO top the list of investors with funds stuck in the country.

By Polly Bindman

Overseas investors with the largest exposure to Russian debt prior to the Putin regime’s invasion of Ukraine include the US asset managers BlackRock and PIMCO, which could face substantial losses if Russia defaults on its debt repayments. 

Data from the investment analysts Morningstar Direct shows the top fund managers by total exposure to Russian fixed income according to December 2021 filings, the latest date when full disclosures are available. (The data therefore excludes any divestments made since the invasion). 

Russia is scheduled to repay investors a total of $117m in interest payments on two of its sovereign bonds today (Wednesday 16 March). It has 30 days to come up with the cash before this counts as a default.

Fund managers aren’t the only investors that risk taking a hit: international banks are owed $121bn by Russia-linked entities, according to data from the Bank for International Settlements. 

Struggling to find buyers for their Russian bonds since the start of the invasion, a number of investors have been forced to write them off. Last week, BlackRock reported $17bn worth of losses from its exposure to Russian assets across all funds.

Over 20 asset managers, including BlackRock, Amundi and UBS Asset Management, have suspended their funds with exposure to Russia in recent weeks, leaving their assets stranded.

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