Russia has paid $117 million to meet its interest-payment deadline. The coupon payments on two sovereign bonds should have then been routed from correspondent bank JPMorgan to a London branch of Citigroup for processing payments to bondholders. Neither Citi nor Russia’s Ministry of Finance would comment on the status of the payments, but The Wall Street Journal said the bondholders’ payments arrived on Thursday, “a day late, but well within the 30-day grace period granted under the terms of the bonds.”
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In a sign of other difficulties facing financial services firms, Bank of New York Mellon said Wednesday that it expects to lose $100 million in first-quarter revenue after pulling out of Russia. In a filing with the Securities and Exchange Commission, the bank said it has stopped taking new business in Russia and “suspended investment management purchases of Russian securities. In addition to the first-quarter loss, the bank says it expects an annual revenue reduction of $80 million to $100 million.

More than 400 U.S. companies have withdrawn from Russia since the invasion of Ukraine began on February 24. The list is prepared by Jeffrey Sonnenfeld and Steven Tian of Yale’s School of Management and now separates companies into those that withdraw completely, those the suspend operations but keep future options open, those that reduce some though not all operations, and those that defy demands to take any action against Russia.

There are no signs that Vladimir Putin is prepared to end his war on Ukraine, according to Secretary of State Antony Blinken. On Thursday, Blinken said:

Again today, we have a strong sense of what Russia could do next.

We believe that Moscow may be setting the stage to use a chemical weapon, and then falsely blame Ukraine to justify escalating its attacks on the Ukrainian people.

Manufacturing events and creating false narratives of genocide to justify greater use of military force is a tactic that Russia has used before, including in Georgia.

We believe Russia will bring its mercenaries from private military groups and foreign countries to Ukraine.

President Putin acknowledged as much over the weekend when he authorized the recruitment of additional forces from the Middle East and elsewhere – another indication that his war effort is not going as he hoped it would.

They are also likely to systematically kidnap local officials and replace them with puppets.

Again, this has already begun.

Regarding China, Blinken commented:

We believe China in particular has a responsibility to use its influence with President Putin and to defend the international rules and principles that it professes to support.

Instead, it appears that China is moving in the opposite direction by refusing to condemn this aggression while seeking to portray itself as a neutral arbiter – and we’re concerned that they are considering directly assisting Russia with military equipment to use in Ukraine.

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President Biden will tell Xi Friday that active Chinese support for Russia will result in U.S. retaliation. The phone call is scheduled for 9:00 a.m. in the morning. The call follows a report on Thursday that China has supplied some military assistance to China and is “co-ordinating with Moscow to spread disinformation about US biological weapons labs in Ukraine,” according to a Financial Times op-ed by Evan Medeiros, the Penner Family Chair in Asia Studies in the School of Foreign Service and the Cling Family Distinguished Fellow in U.S.-China Studies.

Medeiros writes that China “openly expresses sympathy and support for Moscow’s actions, avoids any responsibility, denies the contradictions in its position, blames the US and Nato and calls for diplomacy.” He calls Europe the “key geopolitical swing vote” now that China has aligned itself with Russia and concluded that “the US-China relationship has transitioned to a long-term rivalry.” Medeiros says European leaders should argue that Putin’s actions “will create global disorder and a new type of cold war” that “undermines the international structures that facilitated China’s rise.”

The Chinese apparently are not convinced. Medeiros concludes:

Chinese officials are reportedly telling European diplomats in Beijing: “You have lost Russia, you can’t lose China, too.” Europe should reply that if China has lost the US and is shackled to Russia, then it can’t afford to lose Europe as well.

Russian missiles hit the western Ukraine city of Lviv on Friday morning. The shelling reflects a widening of Russia’s tactic of besieging and reducing Ukrainian cities. Lviv had been a relatively safe haven for citizens fleeing cities like Kharkiv, Chernihiv and Mariupol that are being destroyed by Russian missiles and artillery.

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