Russia is at risk of default, with few signs of payment from investors holding its international bonds. It would be the nation’s first default since 1998. It is $ 100 million in interest on two bonds, one denominated in dollars and one in euros, maturing in 2026 and 2036. Moscow was due to pay the two bonds on May 27, but it was a ‘grace’ period of 30 days was granted which expires today. Russia has struggled to keep payments on the $ 40 billion of bonds outstanding since the February 24 invasion of Ukraine. The attack resulted in extensive sanctions that effectively cut the country out of the global financial system and made its assets untouchable for many investors. The Kremlin has repeatedly stated that there is no reason for Russia to default, but that it is unable to send money to bondholders due to sanctions, accusing the West of trying to push it into an artificial default. The country’s efforts to avoid what would be its first default on international bonds since the Bolshevik revolution more than a century ago met an insurmountable obstacle when the U.S. Treasury Department’s Office of Foreign Assets Control (Ofac) fact blocked Moscow from making payments at the end of May. “Since March we thought a Russian default was probably inevitable, and the question was only when,” Dennis Hranitzky, head of sovereign litigation at Quinn Emanuel law firm, told Reuters. “Ofac intervened to answer this question and default is now upon us”. “Although a formal default would be largely symbolic, given that Russia cannot take out international loans at the moment and does not need it thanks to its rich oil and gas receipts, the ‘brand’ would likely increase its borrowing costs in the future” , he explains. And in any case it would be a severe blow to the prestige of the nation. The Russian finance ministry said it made payments to its onshore National Settlement Depository (NSD) in euros and dollars, adding that it has fulfilled its obligations. However, the funds are unlikely to reach many international holders. For many bondholders, failure to receive the money owed on their accounts in time constitutes a default. As no specific deadline was specified in the prospectus, the lawyers argue that Russia may have until the end of the next business day to pay the bondholders.