The S&P credit rating agency has said that Russia’s attempts to pay bondholders in rubles, not dollars, amount to defaults on the country’s foreign debt.

Russia has now attempted to pay holders of two dollar-denominated bonds that recently finished maturing with rubles, CNN Business reported. The S&P said that this amounted to a “selective default” because the people redeeming these bonds are likely unable to convert the rubles into “dollars equivalent to the originally due amounts.”

A “selective default” is declared when an entity has defaulted on a specific obligation but not on its entire debt.

The Russian government is currently in the middle of a 30-day grace period that began April 4 that will enable Moscow to make payments of capital and interest on the redeemed bonds. However, the S&P does not expect that Russia will be able to convert the bonds into dollars given the thoroughgoing sanctions placed on Russia by Western nations.

These sanctions undermine Russia’s “willingness and technical abilities to honor the terms and conditions” of its financial obligations to bond holders.

If Russia issues a full foreign currency default, it will be the country’s first in more than 100 years. The last time Russian leaders issued a default was after the Bolshevik leader Vladimir Lenin rejected bonds that were previously issued by the regime of Tsar Nicholas II.

Currently, the Russian government cannot access the more than $310 billion it has stored in foreign currency reserves as a result of Western sanctions aggressively isolating the Russian economy. Up until last week, the U.S. allowed Russia to continue using some of these frozen assets to pay back specific investors with U.S. dollars.

Since then, the U.S. Treasury has blocked Russian banks from accessing its financial reserves held in American banks in a deliberate effort to diminish Russian President Vladimir Putin’s ability to finance his military.

JPMorgan estimates that Russia had around $40 billion of foreign currency debt at the end of 2021, and it believes that half of that was held by foreign investors.

The Russian government remains defiant in the midst of this default and intends to take legal action at the international level so that investors can receive what they are owed.

Russian Finance Minister Anton Siluanov, said, “We will sue, because we undertook all necessary action so that the investors would receive their payments.”

He said, “We will show the court proof of our payments, to confirm our efforts to pay in rubles, just as we did in foreign currency. It won’t be a simple process.”