Euroclear faces Fitch rating risk over Russian frozen assets
Ratings agency Fitch has put Euroclear Bank on “rating watch negative”, citing potential legal and liquidity risks stemming from the European Union’s plans to use frozen Russian central bank assets to fund a reparations loan to Ukraine.
Euroclear, based in Belgium, manages bonds and cash for the Russian central bank, which have matured but remain frozen due to EU sanctions. Currently, the cash is held in European Central Bank overnight deposits, News.Az reports, citing Reuters.
The EU plans to redirect these funds into zero-coupon bonds issued by the European Commission, with the proceeds used for a loan to Ukraine that would be repaid once Russia pays war reparations under a future peace agreement.
Fitch warned that without sufficient legal safeguards and liquidity protections, Euroclear could face a maturity mismatch if Russian liabilities become payable. The agency will decide on Euroclear’s ratings once there is more clarity, potentially following the upcoming EU summit.
The watch affects Euroclear Bank and Euroclear Holding’s long-term ratings (AA), short-term IDRs (F1+), viability ratings (aa), and debt ratings, Fitch said.
Euroclear emphasized that with proper safeguards, it is confident material risks can be managed in both the short and long term.
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