S&P Global Ratings cut Russia’s credit score, saying the country’s debt is “highly vulnerable to nonpayment.” 

The company lowered the country’s rating by a single notch to CC, two levels above default, as it understands investors did not receive coupon payments on U.S. dollar-denominated bonds due Wednesday owing to technical difficulties related to international sanctions, S&P said in a statement. 

“If funds are not accessible for investors or if a payment is made in a currency not stipulated in the terms of the obligation and we believe that the investor does not agree to the alternative payment, we could deem this a default,” the statement read. 

Russia has a 30-day grace period to meet its obligations, according to the terms of the bonds. If the nation defaults, it would be the first time in more than a century that it has not paid its foreign-currency debts. Ratings companies have slashed the nation’s credit score since Russia invaded Ukraine last month, as fears of default mount with the country facing increasing economic isolation. 

“The downgrade means Russia is on the brink of default,” said Brendan McKenna, a strategist at Wells Fargo in New York. “But it’s really a reflection of Russia’s diminished ability to repay bondholders. The sanctions limit Russia’s ability to access U.S. dollars, and the coupon payments that were due yesterday had to be made in dollars.”

Some investors earlier took heart from reports that JPMorgan Chase & Co. had processed funds that were earmarked for the interest payments and sent the money on to Citigroup Inc., sending Russia’s bond prices higher across maturities. The U.S. Treasury said on Wednesday that its restrictions on dealings with Russia’s central bank and other Russian institutions don’t bar that country from making payments on its dollar debt, at least until late May.

S&P is keeping Russia’s ratings on a negative watch and said it could lower its foreign-currency issuer rating to selective default “if the Russian government fails to make a debt service payment in accordance with the terms of the obligation, and if we do not expect such payment to be made within an applicable grace period.” The company is also monitoring payments on ruble bonds, saying it understands some non-resident holders of Russia’s local-currency debt might not be able to access payments on those bonds in Russia.

The Russian government’s statements suggest it’s still trying to transfer payments to holders of the dollar bonds, S&P wrote, adding that future attempts to pay foreign-currency debt may face similar technical difficulties in the coming weeks.