Ways out of Russia's big freeze

The original 90-day moratorium imposed by Russia on payments by Russian borrowers in foreign currency overseas expires this month. The question for foreign bankers is what they can do about it. Last month law firm Allen & Overy hosted a packed-out conference where a panel of experts provided guidance.

The announcement of the moratorium sent lenders scurrying to study loan documentation. The moratorium catches - in relation to loans with terms exceeding 180 days - repayments of principal to non-resident lenders (interest can still be paid), transfers by residents to offshore accounts to repay loans and transfers of foreign-currency denominated securities payable to non-residents or third-party residents to repay principal. The moratorium excludes payments by state entities, payments to multilaterals and export finance. There is doubt about the legal validity of the directives and regulations made under the moratorium but in practice this does not affect foreign creditors' positions.

To fall within the...