(Reuters] – Russia will pay $117 million interest on two sovereign bonds in dollar dollars on Wednesday. These are the first such payments made since Russia invaded Ukraine. It triggered a raft sanctions by Western capitals as well as countermeasures from Moscow.

Russia’s financial ministry stated Monday that they had sent a payment order to a correspondent banking bank in respect of eurobond coupons amounting to $117.2million. These are due Wednesday.

Questions have been raised about Russia’s diplomatic and economic standing and whether or not they will be able make the payment. It raises concerns that Russia could default on major debts it has owed since 1917, when Bolsheviks did not recognize Tsarist loans.

This is what we know so far about Russia’s debts and how they will be repaid.

HOW MUCH DO RUSSIA OWE IN HARD-CURRENCY BONDS

Russia currently has 15 international bonds worth around $40 billion, with around half being held by foreign investors.

These coupons are only the beginning of many, and there will be $615 million more due in the remaining months. After the maturation of a $2B bond, April 4, the principal payment becomes due.

Bonds themselves were issued with a mixture of terms and indentures. All bonds sold following Russia’s 2014 annexation and subsequent sanctions have a provision to allow for currency alternative payments. The rouble can be listed as an alternate currency for bonds that were issued after 2018.

MOSCOW PAYS?

The sanctions have been severe, particularly the freezing of central bank currency reserves. Moscow initially refused to send hard currency to foreign investors, despite the possibility of being subjected for years to harsh sanctions.

On March 5, the president issued a presidential decree stating that Russian creditors have the right of paying foreign creditors in rubles and by depositing their money in a type C account at national depository. The central bank or the finance ministry may make exceptions.

These statements were later more detailed and seem to permit hard currency payment. On Monday, the finance ministry stated that it approved a temporary FX payment procedure and assured that Russia would fulfill its obligations in good time.

Russia can withdraw funds from foreign banks if they fail to make the payment.

WILL INVESTORS BE ABLE to RECEIVE THE MONEY

Due to sanctions from both countries, it is now more difficult for Russia to transfer funds and for investors abroad to receive them.

General license 9A was issued March 2, by the U.S. Office of Foreign Assets Control. It authorizes U.S. citizens to receive interest, dividends, or maturity payments for debt or equity issued by Russia’s central bank, finance ministry or national wealth fund. This exemption expires on May 25, with Russia expected to pay almost $2 billion in sovereign bonds externally after the deadline, and up until year end.

WHAT IS THE PROSPECT FOR A RUSSIAN DEFAULT

It seemed unlikely that Russia would suffer an external debt default, with international bonds traded above par well into February.

Now bonds are at distressed levels. Some even barely at 10% of their original value due to harsh sanctions.

Many payments due, such as the Wednesday payment have a 30 day grace period in which Russia can make the payment. Some issues allow for a 15 day grace period. The Wednesday coupon must be paid in U.S. dollar, as opposed to some other Russian bonds.

Analysts predict that defaulting on the due date or failing to pay in full would result in the forfeiture of any grace period funds. JPMorgan (NYSE) states that external bonds have a cross default provision. This is a clause with a $75 million threshold to activate.

What would be the consequences of a default?

Länder in default do not have access to capital markets internationally, but Russia has been blocked from these markets due to current restrictions.

A default can have severe consequences.

This could lead to Russian default insurance policies called Credit Default Swaps, (CDS), which investors can take out in this type of scenario. JPMorgan, an investment bank estimates that there is approximately $6 billion in outstanding CDS to be paid.

International asset managers are not the only ones who have to worry about Russia’s debt. Evgeny Suprov, CentroCredit Bank’s Russia-based economist said: “Many Russian investors purchased the paper using their Western accounts.” It is believed that Russian investors hold the majority of sovereign foreign debt bondholders.

Russian banks may also find themselves in trouble due to the bond portfolio that makes up part their capital buffers.

Russian corporations are under more pressure when they fall foul of defaulting sovereigns. They have used international capital markets for financing in the past and currently have close to $100 billion worth hard currency bonds.