Ukraine war raises spectre of Russia's first external debt default

Russia has never defaulted on sovereign hard currency debt, but reserve freeze, severed financial ties, politics pose risk ; Moscow has stopped payments on local sovereign bonds already

With much of Moscow's $640 billion reserves under lock and key in the West and sanctions crippling cross-border capital flows, investors fear Russia may be heading for its first ever default on sovereign hard currency debt.

On Wednesday, foreign investors were effectively stuck with their holdings of rouble-denominated bonds -- known as OFZs -- after the central bank temporarily halted coupon payments and settlement system Euroclear stopped accepting Russian assets.

A rouble debt default has precedent -- Moscow reneged on OFZs during its 1998 financial crisis, but even then it kept up dollar bond payments. Before the latest devastating Western sanctions which