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MOSCOW—Russia is struggling to sell debt in its first attempt to tap global capital markets in three years, according to people familiar with the matter.

Investors said the deal has struggled to find demand from foreign buyers, in a blow to Moscow as it looks to break out from financial isolation caused by two years of sanctions.

The bond sale deal had been scheduled by its bankers to close late on Monday, the day it was issued. That was postponed until Tuesday and has now been pushed back to Wednesday, a banker familiar with the matter said.

Russia on Monday surprised markets by announcing its first sovereign-bond sale since Western sanctions were imposed in 2014 following the country's 2014 annexation of Crimea. The Russian Finance Ministry said VTB Capital, a unit of state-owned lender VTB Group, was the sole organizer of the dollar-denominated offering via a Russian clearinghouse.

"It looks like they really want to find foreign demand without a roadshow," said Denis Poryvai, an analyst at Raiffeisen Bank in Moscow. Companies and countries looking to tap public markets will typically market it to investors through a roadshow.

Analysts said Russia wanted to show that it could raise billions of dollars by selling debt despite the sanctions.

The Finance Ministry didn't respond to a request for a comment.

Earlier this year, Moscow struggled to attract major global banks to help sell $3 billion in bonds, as banks were unwilling to upset U.S. and European authorities.

Investors said international demand for the deal will be limited by the absence of a major Western bank in the deal and the fact that the settlement of the bond will be carried out in Russia, rather than by global agencies.

Write to Andrey Ostroukh at andrey.ostroukh@wsj.com<mailto:andrey.ostroukh@wsj.com>

Write to Andrey Ostroukh at andrey.ostroukh@wsj.com

(END) Dow Jones Newswires

May 24, 2016 12:55 ET (16:55 GMT)

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