Market Outlook

Pimco stands to lose billions if Russia defaults on its debt

Pimco has billions of dollars riding on the economic fallout from Vladimir Putin’s invasion of Ukraine, after amassing a wager worth at least $1bn in derivatives markets that the country will not default while also holding $1.5bn of its sovereign debt. The California-based asset manager started off the year exposed to $1.1bn of credit default swaps on Russian debt. The derivative contracts are intended to compensate the holders in the event that the underlying bond issuer, in this case Russia, fails to make its payments.

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