A top Russian lender has written off nearly $6 billion in accrued interest on a perpetual bond as companies struggle to service their debts

Russian lender Sovcombank PJSC has canceled $5.81 million of accrued interest on one of its perpetual bonds, the first company to make such a move as sanctions continue to impact creditors’ ability to pay. repay their debt, Bloomberg reported on Monday.

Bondholders’ rights and claims to canceled interest “will become null and void,” it said in a regulatory filing on Monday.

Sovcombank’s move with its perpetual bond, a fixed-income security with no maturity date, is rare among European banks.

Wartime Western sanctions have made it difficult for Russian companies to meet their debts, and many companies have had to pay in rubles or have payments pending.

Sovcombank, Bloomberg reported, is the first borrower to date to cancel payments. Its perpetual notes, however, include a feature that allows the borrower to write off some or all accrued interest before a coupon date arrives.

Moscow has carried out a series of maneuvers to keep the country’s economy intact since Putin ordered the invasion of Ukraine. However, a Moscow broker said the calm projected by the Russian authorities was just a facade and that the markets were “completely artificial” at the moment.

Other measures to avoid economic turmoil include strict capital controls that have strengthened the ruble and a ban on foreign investors disposing of their domestic assets.

The bond market in particular took a hit, the broker told Insider, and bargain hunters flocked in hopes of enjoying a rebound.

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