Rusal bonds slump, customers review contracts as U.S. sanctions bite – by Polina Ivanova (Reuters U.S. – April 10, 2018)

MOSCOW (Reuters) – Rusal’s (0486.HK) dollar bonds slumped to record lows, two major customers said they were reviewing their contracts, and the London Metal Exchange distanced itself from the aluminum giant on Tuesday, in the latest aftershocks from U.S. sanctions.

The sanctions imposed on Rusal and its boss, metals magnate Oleg Deripaska, mark the first time a major international company has been targeted by Washington in its moves to punish Russia for alleged meddling in the 2016 U.S. election.

While Russian markets, including the rouble, fell across the board on Monday, Rusal assets were hardest hit, with its Hong Kong-listed shares halving in value and the company warning it risked tipping into technical default.

On Tuesday its dollar bonds maturing in 2023 fell 17.3 cents to a new low, according to TradeWeb. Their yields had previously been steady at around 6 percent, but on Tuesday spiked to 28.5 percent, a record high. XS1759468967=TE

Swiss-based commodities trader Glencore (GLEN.L), a Rusal shareholder and one of its biggest customers, said it was evaluating the position under its contracts with Rusal in the light of the sanctions.

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