The Kremlin's $3bn Eurobond is in jeopardy after the European Union joined the Unite States in trying to pressurise banks not to participate in the controversial deal, seen as possibly enabling Russia to sidestep the effect of international economic sanctions.

Pressure from the EU is already paying off. Germany's Deutsche Bank won't be sticking its hand in the air to be an organiser of the issue, newswire TASS reported, citing two investment banking sources. France's BNP Paribas is also understood to be standing down from the deal.

A roster of US banks, including Goldman Sachs, Bank of America, Citigroup, JP Morgan and Morgan Stanley are also believed to have withdrawn their names from the syndicate following pressure from the US Treasury. It remains to be seen if Swiss banks UBS and Credit Suisse have the gumption for the deal, along with Italian lenders, whose leaders tend to have close ties to the Kremlin.

"It seems likely now after the US and EU interventions that more Western banks are re-considering whether they really want to lead manage such as deal, against the now fairly clear recommendation of their home governments/regulators," Tim Ash, an emerging markets economist at Nomura International in London, wrote in an e-mailed note.

The EU and US sanctions do not specifically prohibit acquiring Russia's sovereign debt, but proceeds from the placement could potentially be channelled down to sanctioned entities, the Brussels guidance to EU banks reportedly says. "It is clear that they don't want us to take part," one banker told the Financial Times earlier, "We are being discouraged."

Asian oasis dry for Russia

Herman Gref, chief executive of Russia's largest lender Sberbank, told Bloomberg TV on March 15 that Russia may find demand for the deal in China and Asia.

Yet Gref himself already poured cold water on the prospect of Russian firms raising any money in Asia in more considered thoughts back in December 2014.

"Colleagues, you won't see the eastern money," Gref told delegates at a Transport forum. "You should not be waiting for this. Today we see an enormous rivalry for money."

Gref, a former economy minister under President Vladimir Putin, said he had visited a number of "eastern" countries together with the head of the Russian Direct Investment Fund Kirill Dmitriev.

"I want to say that there are no volunteers lining up to invest in this country," Gref said. "Only we are standing in a queue for money."

Putin had hoped that Chinese banks would replace Wall Street as the country's key source of funding after financial sanctions were slapped on Russia for annexing Crimea and fomenting war in eastern Ukraine.

Turn the clocks forward to today and it transpires that Chinese banks have a negligible appetite for bailing out the Russian economy. The heads of sanctioned state-controlled lenders VTB and Gazprombank also went cap in hand on roadshows to Asia looking for financing. However, they found that Asian bankers were unwilling or unable to invest, partly out of fear of incurring the wrath of US regulators.

Russia's budget for 2016 provides for the possibility of borrowing on foreign markets up to $3bn.

In early February, the Russian Finance Ministry sent requests to 25 foreign and three national banks to participate in placement of its Eurobonds in 2016.

"Heard through the grapevine that some Western banks might have put in less than competitive bids - trying to keep both Western regulators happy, while also not annoying the Russians and closing off the Russian market from future business," said Nomura's Ash.

"Typically the last Russian sovereign deals paid little/no fees, but this time around the Russians might be willing to leave lots of cash on the table to get big names involved, and to ensure a successful deal, at least from a PR perspective. So it would be a case of  'be careful what you bid for' as you might actually be surprised as being named as a lead manager, with MinFin agreeing to pay lucrative fees to get the deal done," he added.