A panel of major securities dealers and investors has ruled that Russia is in potential default after it failed to meet its bond obligations.

The Credit Derivatives Determinations Committee on Wednesday upheld the claim by investors that Russia did not include additional interest following a delay on the repayment of a dollar-denominated Russian bond at maturity on April 4.

The Russian government initially said it would pay in rubles on the note and ultimately made the payment in dollars nearly a month later. Investors claimed Russia has not paid them interest accrued during that period.

With the latest decision, markets may deem Russian bonds are effectively in default.

This will narrow options for the Russian government and Russian firms for raising money.

The Kremlin has insisted that it has both the funds and willingness to meet payout obligations, citing differences from the 1998 Russian financial crisis.