Log in
Log in
Or log in with
GoogleGoogle
Twitter Twitter
Facebook Facebook
Apple Apple     
Sign up
Or log in with
GoogleGoogle
Twitter Twitter
Facebook Facebook
Apple Apple     
  1. Homepage
  2. Equities
  3. Japan
  4. Japan Exchange
  5. Sharp Corporation
  6. News
  7. Summary
    6753   JP3359600008

SHARP CORPORATION

(6753)
  Report
Delayed Japan Exchange  -  01:00 2022-12-08 am EST
1017.00 JPY   +1.50%
05:10aWall Street Cues, Recession Concerns Undercut Tokyo Stock Market
MT
12/02Stronger Yen Sends Export Issues, Tokyo Shares Lower
MT
11/07Japanese shares rise on Wall Street gains, robust outlook
RE
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisionsFunds 
SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

The "Big Package": How Russia was driven to default

06/27/2022 | 01:19pm EST
FILE PHOTO: EU leaders hold summit on Russian oil sanctions, in Brussels

LONDON (Reuters) - Russia's first major international debt default in over a century, which Washington said became a fact on Monday, follows months of co-ordinated Western sanctions that left Moscow with cash but o access to the international financial network.

Below is a summary of the key moments that have led up to this point.

THE "BIG PACKAGE"

At around 11.30 p.m. (2230 GMT) on Feb. 25, the day after Russian troops entered Ukraine, European Union's experts in Brussels said a set of sanctions they had worked on for days, or the "Big Package" as they called it, was ready.

Just before midnight, the European Commission announced https://www.consilium.europa.eu/en/press/press-releases/2022/02/25/russia-s-military-aggression-against-ukraine-eu-imposes-sanctions-against-president-putin-and-foreign-minister-lavrov-and-adopts-wide-ranging-individual-and-economic-sanctions the measures.

While emergency Group of Seven and EU meetings earlier made clear a response was coming, the package named Vladimir Putin and his to diplomat Sergey Lavrov personally, and, as it later became clear, froze some $300 billion of the Russian central bank's reserves.

"That was really the moment when we said, okay, well we've done it," one European source told Reuters. "That was, I think, a very pivotal moment for a lot of people around a table."

EU's Von der Leyen lays out Russia sanctions

SWIFT ACTION

Days later, on March 2, the EU struck again https://www.consilium.europa.eu/en/press/press-releases/2022/03/02/russia-s-military-aggression-against-ukraine-eu-bans-certain-russian-banks-from-swift-system-and-introduces-further-restrictions by banning seven Russian banks from SWIFT, an international financial messaging system crucial for cross-border transactions.

Booting Russian lenders from SWIFT had long been considered a 'nuclear option,' but the invasion put it on the table and when the EU decided to activate it, those at SWIFT headquarters just outside Brussels were ready.

The only question was how long they had to implement the move, "five days or five minutes?" another source said. In the end is was 10-12 days.

FIRST CUTS, BUT NOT THE DEEPEST

Credit rating agency, S&P Global, already stripped Moscow of its coveted investment grade rating on Feb. 26 and Russian bonds were slumping, but a heavier blow followed on March 15, when the EU told top credit agencies to stop rating Russian dept or risk losing their licenses to operate in the bloc.

"We were caught flat-footed, certainly we were not given any advanced warning," one senior rating agency analyst said. "Basically the question was, does this mean we can't rate Russia any more?" It turned out the answer was yes.


Driven to default Driven to default

DEFAULT DEADLINE ONE

With so many hurdles being erected, expectations built that Russia would default on its first post-sanctions' bond payments either on March 16, or a month later at the end of a 30-day "grace period."

However, a special "waiver" in the U.S. sanctions granted by the Treasury's Office of Foreign Assets Control allowed payments to go through.

UNINTENDED CONSEQUENCES

On April 8, a week before EU ban on Russian ratings was due to come into force, S&P declared Russia in "selective default" after Moscow said it planned to make upcoming bond payments in roubles rather than dollars, their issue currency.

On May 3 though, shortly before the payment was due, the Kremlin U-turned and paid in dollars.

SHOCK TO THE SYSTEM

Days later, Russia had stumbled, though.

On May 11, sharp-eyed creditors spotted that Moscow had failed to add $1.9 million of extra interest that had built up on bonds that only got paid in their grace periods rather than on time. They contacted the clearing house Euroclear and then bond market equivalent of an insurance payment arbiter - the Credit Derivative Determinations Committee https://www.cdsdeterminationscommittees.org/cds/the-russian-federation which ruled that a "credit event" had happened.

The sum was too small to trigger default clauses in all of Russia's international bonds, but it did mean some investors expected to receive default insurance payments.

But when the U.S. Treasury clarified on its website that buying Russian bonds on the open, or 'secondary' market, was banned, that CDS insurance process had to be halted as it was no longer clear what to do with the bonds involved.

"It is a bit like if your house burns down and the insurance company turns around and claims it was the wrong kind of fire," said Joe Delvaux, emerging markets distressed debt portfolio manager at Europe's largest fund manager Amundi. "The reality is that these sanctions are a shock to the system."

INTENDED CONSEQUENCES

The step that made Russia's default unavoidable though was Washington's May 24 decision to let the waiver that had allowed U.S. bondholders receive Russia's payments, expire.

A week later, the EU also sanctioned Russia's domestic paying agent, its National Settlement Depository (NSD), which it had been using to make the payments.

Moscow has blamed the West for forcing an "artificial default"., with its finance minister Anton Siluanov calling the situation a "farce."

However, veteran global policymakers involved in the process say they sanctions are unprecedented but fully justified.

"They were very significant actions that responded to the magnitude of the actions that Russia undertook," Agustin Carstens, the head of the world's central bank umbrella body, the Bank for International Settlements, said.

Biden stresses power of U.S. sanctions

(Additional reporting by John O'Donnell in Frankfurt, Francesco Guarascio in Brussels, Andrew MacAskill, Karin Strohecker and Vincent Flasseur in London and Gavin Jones in Milan; Editing by Tomasz Janowski)

By Marc Jones


ę Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
AMUNDI 0.09% 54.05 Real-time Quote.-25.57%
SHARP CORPORATION 1.50% 1017 Delayed Quote.-24.15%
All news about SHARP CORPORATION
05:10aWall Street Cues, Recession Concerns Undercut Tokyo Stock Market
MT
12/02Stronger Yen Sends Export Issues, Tokyo Shares Lower
MT
11/07Japanese shares rise on Wall Street gains, robust outlook
RE
11/06Japanese shares rise on Wall Street gains, robust corporate outlook
RE
10/19Sharp : Indoor Photovoltaic Device, LC-LH Wins the Minister of Economy, Trade and Industry..
PU
10/18Nikkei 225 Up 1.4% on Wall Street Cues
MT
10/18Japanese stocks end higher as Wall Street, U.S. futures rally
RE
10/14Sharp Corporation - World's first 1 report, the potential effect of Plasmacluster Techn..
AQ
10/13Sharp : Plasmacluster Technology Demonstrates Effectiveness(2)
PU
10/07Nikkei 225 Off 0.7% as Tech Issues Soften
MT
More news
Analyst Recommendations on SHARP CORPORATION
More recommendations
Financials
Sales 2023 2 561 B 18 748 M 18 748 M
Net income 2023 20 359 M 149 M 149 M
Net Debt 2023 389 B 2 852 M 2 852 M
P/E ratio 2023 31,9x
Yield 2023 3,39%
Capitalization 660 B 4 834 M 4 834 M
EV / Sales 2023 0,41x
EV / Sales 2024 0,40x
Nbr of Employees 47 941
Free-Float 33,9%
Chart SHARP CORPORATION
Duration : Period :
Sharp Corporation Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends SHARP CORPORATION
Short TermMid-TermLong Term
TrendsBullishNeutralBearish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus UNDERPERFORM
Number of Analysts 11
Last Close Price 1 017,00 JPY
Average target price 847,27 JPY
Spread / Average Target -16,7%
EPS Revisions
Managers and Directors
Po-Hsuan Wu President, CEO & Representative Director
Mototaka Taneya Managing Executive Officer, GM-R&D Business
Yasuo Himeiwa Independent Outside Director
Yutaka Nakagawa Independent Director
Masahiro Okitsu Representative Director & Executive Vice President
Sector and Competitors