Sanctions drive Russia to first foreign debt default since 1918

Our thought bubble, via Axios' Felix Salmon: Bond defaults normally happen because the issuer doesn't want to make the payment. In this case, Russia was clearly willing to do so; it just wasn't able to.

The big picture: Russia hasn't defaulted on international debts since the Bolshevik Revolution, though it defaulted on domestic debt during a financial crash in 1998.

• Russian officials have struggled with payments on $40 billion of outstanding bonds since the U.S. and allies moved to impose sanctions on the country after Putin's forces launched their invasion last February.
• Russia's President Vladimir Putin signed a decree last week for a temporary measure giving the government 10 days to pick banks to handle payments under a new scheme, indicating Russia will regard its debt obligations fulfilled by paying bondholders in rubles, Reuters reports.

What to watch: Although the deadline passed for Russian officials to meet a 30-day grace period on interest payments that were originally due on May 27, it could be a while before a default is confirmed, AP notes.

Editor's note: This article has been updated with more details on Russia's outstanding bond payments and further context.