Pimco’s huge exposure to Russian debt has come under scrutiny after the invasion of Ukraine by Russia elicited international outrage.

According to an annual report, the Pimco Income Fund (PIMIX), a $140 billion asset manager held $1.14 trillion worth of Russia’s government international bonds at the end of 2021. Dan Ivascyn was the chief investment officer. He also managed to write $942million of protection against credit default swaps on Russia.

The CDS allow investors to trade credit risk. Pimco will also have to make payments if Russia defaults on its debt.

This year’s fund has fallen by 5.1%, which is slightly less than the Bloomberg benchmark bond index.

Similar positions were held by Pimco’s Emerging Markets and Total Return bond funds, which also had ties to Russia.

Financial Times was first reported on Pimco’s Russia exposure earlier Thursday. Pimco did not respond to our request for comment.

Pimco could suffer huge losses from these positions as Russia may be closer to defaulting on its sovereign debt due to massive U.S. sanctions.

Fitch, a rating agency, downgraded Russia’s sovereign rating to C, a six-notch further in junk territory, earlier this week. Fitch said that a default was “imminent.”

Moody’s and S&P have also slashed the country’s sovereign rating to “junk” status, saying Western sanctions could undermine Russia’s ability to service its debt.