Just as they promised (and acting unilaterally as Europe declined to go along with The White House), President Obama has unleashed a set of ‘sectoral’ sanctions to wreak havoc in Russia. The sanctions include the standard travel bans but adds rules that block several of Russia’s largest firms from American debt markets. The plan – to restrict funding availability for Russian firms to under 90-days – is however, dead-on-arrival. As we explained here, Russian companies, facing $115 billion of debt due over the next 12 months, will have the funds even if bond markets shut as “the amount of cash on balance sheets of Russian companies, committed credit lines from banks and the operating cash flows they will get is sufficient for the companies to comfortably service their liabilities.” This will do nothing but raise Putin’s ire even more.
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