INTERNATIONAL: "Both Russia and Belarus are in square default territory," Reinhart said in an interview. "They're not rated by the agencies as a selective default yet, but mighty close."

Fitch on Tuesday downgraded Russia's sovereign rating by six notches further into junk territory to "C" from "B," saying a default is imminent as sanctions and trade restrictions have undermined its willingness to service debt.

Reinhart said financial sector repercussions had been limited thus far, but risks could emerge if European financial institutions were more exposed to Russian debt than assumed.

Around half of Russia's sovereign hard-currency bonds are held by foreign investors and Moscow must make $107 million in coupon payments on two bonds on March 16. Russian corporates have just under $100 billion in international bonds outstanding.

Foreign banks have exposure of just over $121 billion to Russia with much of that concentrated in European lenders, according to data from the Bank of International Settlements.

"I worry about what I do not see," Reinhart said. "Financial institutions are well-capitalized, but balance sheets are often opaque ... There is the issue of Russian private sector defaults. One cannot be complacent."

China also rapidly expanded its lending to Russia after its 2014 annexation of Crimea, she said.

UKRAINE'S DIFFICULT SITUATION

Analysts say Ukraine will also need debt relief this year given its massive war-related outlays and a heavy debt burden of $94.7 billion at the end of 2021, although the country has vowed to service its debt on time and in full.

Reinhart said it was reasonable to expect Ukraine to seek cash-flow relief, and expressed confidence that creditors would be receptive given the current situation. Ukraine could also miss an upcoming coupon payment, at least during the grace period, without its credit rating suffering, she said.

"Ukraine has and will have open doors given its very difficult financial situation," she said. "You’re not declared in default as long as you’re still within the grace period.”

Ukraine's sovereign debt includes $1.6 billion owed to Paris Club creditors, and $4.9 billion to non-Paris Club creditors, most of which is held by China, according to debt experts.