Record wave of defaults hits Russian businesses in the fourth year of the war
Russia’s corporate debt market faced its most severe crisis since the start of the full-scale invasion in 2025, with defaults and forced restructurings recorded at 48 companies. According to data from Cbonds, the number of distressed issuers significantly exceeded previous years, when between 25 and 32 companies annually struggled to service their debt.
A defining feature of the current crisis is that 36 of the defaulting companies were previously considered reliable borrowers, indicating systemic economic exhaustion under the pressure of high interest rates and international sanctions.
Most negative credit events in 2025 were outright defaults, with their total value reaching 15.6 billion roubles, while the volume of technical defaults increased almost fourfold year-on-year. Although the total value of problematic bonds—18.1 billion roubles—formally accounts for less than 0.1% of the market, the widespread refusal to meet debt obligations among small and medium-sized businesses points to a critical shortage of liquidity.
The average size of an individual default stood at 62 million roubles, highlighting the particular vulnerability of smaller firms that lack access to state subsidies or preferential lending, unlike corporations closely linked to the Kremlin.
The deterioration in the financial stability of Russian issuers is occurring against the backdrop of the Central Bank of Russia maintaining its key interest rate at record-high levels, making debt servicing unsustainable for many sectors. Analysts warn that the wave of defaults could spread to larger companies in 2026 if Russia’s war expenditures continue to crowd out market-based financing mechanisms.
This dynamic risks triggering a domino effect, in which technical difficulties at individual enterprises evolve into a genuine threat to the stability of the aggressor state’s entire financial system.
Meanwhile, since late 2024, Russia’s annual economic growth has fallen from around 5% to near zero. Analysts cite inflation, war-related spending and declining oil prices amid tariffs imposed by the Trump administration as key factors.
After three years of unexpectedly resilient growth, Russia is now facing a sharp slowdown, as war costs, inflation and falling oil prices begin to weigh heavily on an economy that until recently appeared resistant to sanctions.
