The Issue Of Sanctions

Much has been written regarding the recent EU and US sanctions targeting the Russian capital markets, military and oil sectors (our own commentary can be found here) and the broad nature of the sanctions has, it would seem, produced some (probably) unintended consequences when applied to the mechanics of day to day capital markets operations.  On their face, the capital markets sectoral sanctions are designed to cut off the ability of the sanctioned companies to access funding in the equity and debt markets.  Hence, broadly speaking, anybody who must comply with EU or US sanctions cannot participate or deal in any new debt or equity issued by a sanctioned entity once they have been put on the sanctions lists.  Existing debt or equity issued prior to the implementation of sanctions is grandfathered.