UPDATE 3-Gazprom bond payments trickle through to some creditors as sanctions rise

(Adds confirmation on payments due June 29, background)

LONDON, July 19 (Reuters) - Payments due on international bonds issued by Russia's Gazprom have been transferred to some creditors, a source familiar with the matter said on Tuesday, amid the economic tit-for-tat surrounding the country's gas flows to Europe.

This includes the payment due on a 500 million Swiss franc ($516 million) bond maturing on Tuesday and two other payments that fell due on June 29, the source told Reuters. Another source confirmed that the latter two payments had found their way to some creditors.

However, a payment due on a $1 billion dollar-denominated bond maturing on Tuesday had not yet reached investors, the first source added.

Russia and a number of its corporates - once investors' darlings for lucrative yields and healthy state finances - have found themselves unable to service its debt following Western sanctions aimed at stopping Moscow's military actions in Ukraine.

The country's firms had nearly $100 billion in hard-currency bonds outstanding when Russia invaded Ukraine on Feb. 24, around half of which had been issued by quasi sovereign issuers with a heavy skew toward the dominant oil and gas sector, data from JPMorgan showed.

Payments from the Kremlin-controlled energy giant come against the backdrop of heightened tensions between Europe and Russia over the delivery of gas to the region through a key pipeline that is undergoing 10 days of annual maintenance scheduled to conclude on Thursday.

The White House and Moody's credit agency last month said Russia had defaulted on its international bonds for the first time in more than a century, after foreign investors did not receive $100 million in coupon payments on two Eurobonds.

Russia's finance ministry rejected the claims of default and said it had fulfilled obligations by making the sovereign coupon payments to its onshore National Settlement Depository in euros and dollars.

CONCERNS OVER PAYMENTS

Gazprom is not sanctioned by the United State or the European Union, though some countries such as Poland, Australia and Canada have put measures on the gas monopoly in place.

However, concerns over whether payments would find their way through to creditors had risen after delays occurred in processing payments due end-June.

Gazprom and Citi - the latter acting as the agent on some of the bonds - did not reply to a request for comment. Deutsche Bank, which acts as the trustee on a number of securities, declined to comment.

The firm has issued its Eurobonds mainly via Gaz Finance and Gaz Capital, its finance arms based in the United Kingdom and Luxembourg, respectively.

Terms for both bonds have a clause that "default will not be an Event of Default if it occurs by reason only of administrative or technical difficulties affecting the transfer of the funds due from Gazprom." That would appear to provide Gazprom with an argument to challenge being called in default if it made a payment but the funds were blocked by sanctions.

The issue documentation also says default will occur if "Gazprom fails to pay ... within 14 business days, in respect of interest or any additional amounts, any amount payable under a loan agreement."

But that refers to the timing of payment between Gazprom and Gaz Finance, and does not specifically refer to the timing of payment by the latter, said a trader who deals with Russian Eurobonds. Tuesday would be 14 business days.

"It takes a longer time to process the payments now due to compliance," the source said, adding that a couple of days' delay is not unusual. ($1 = 0.9683 Swiss francs) (Reporting by Karin Strohecker; editing by Dhara Ranasinghe, Ed Osmond, Emelia Sithole-Matarise and Mark Porter)