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The European Union has expanded sanctions against Russia and added the National Settlement Depository, which Moscow planned to use to service the country’s Eurobonds, to the list of sanctioned entities, an EU document showed on Friday.

Russia said this week it was replacing Citibank, which has stopped servicing the country’s Eurobonds, with its own National Settlement Depository (NSD), as it risks its first major external debt default in more than a century.

After a key U.S. waiver allowing Russia to service its Eurobonds in the original currency of issuance expired last week, Moscow proposed paying Eurobond holders by applying the mechanism it uses to process payments for its gas in roubles.

Under the plan, which was to be presented this month, Russia wanted foreign bondholders to open rouble and hard currency accounts at a Russian bank which would then convert roubles into forex and pay bondholders back via the NSD.

NSD, a Russian version of western clearing houses Euroclear and Clearstream, holds 70 trillion roubles ($1.12 trillion) worth of client assets, including 9 trillion roubles of foreign securities such as Eurobonds linked to the Russian state.

Analysts said that sanctions would block NSD’s accounts in euros as well as in Euroclear and Clearstream and will also make it impossible to service forex-denominated bonds issued by the state and Russian companies.

“There were hopes that the Euroclear-NSD bridge could be renewed but in current circumstances, this will be impossible until after sanctions are lifted or special waivers are granted,” Dmitry Polevoy, head of investment at LockoInvest, said.

Russia has around $40 billion of international bonds outstanding, on which just under $2 billion of payments are due before the end of the year.

Moscow has repeatedly said that it has cash and is willing to pay, blaming the United States and Europe for artificially putting it on the verge of its first default on international bonds since the Bolshevik revolution more than a century ago.

Neither NSD, nor the finance ministry replied to Reuters requests for a comment on EU sanctions.

“This make it impossible to sell foreign stocks held at the NSD but given that the NSD and Euroclear have suspended cooperation earlier, some of the investors were unable to make any deals... anyway,” Promsvyazbank said in a note.

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