Despite payment, investors brace for Russia to default

By KEN SWEET
AP Business Writer

NEW YORK (AP) — Prices for Russian credit default swaps — insurance contracts that protect an investor against a default — have plunged sharply after Moscow used its precious foreign currency reserves to make a last minute debt payment on Friday.  The cost for a five-year credit default swap on Russian debt was $5.84 million to protect $10 million in debt. That price was nearly half the one on Thursday. Russia used foreign currency reserves outside of the country to make the payment, backing down from the Kremlin’s earlier threats that it would use rubles. Despite the payment, investors remain largely convinced that Russia will eventually default on its debts for the first time since 1917.