A lot of these bonds were held by banks and, more particularly, by their customers, the hedge funds. They make highly speculative investments around the world and are not above deliberately destabilising a small country's markets to make a buck. They are highly leveraged, which means most of the money they play with is borrowed. The most acute sufferer from the Russian default was a New York hedge fund called Long Term Capital Management. When an outfit looks like going under, there's a rush for the exit.
Creditors demand their money back before what little is left is gone.
But this makes collapse all the more certain, prompts a fire sale of the outfit's assets and causes the destabilisation to be greater than it otherwise would have been. So the US central bank, the Federal Reserve, stepped in to stop the rout. It spent not a cent of taxpayers' money, nor did it save the bacon of the managers and owners who had screwed up. It acted merely as a referee breaking up a brawl. Metaphorically speaking, it locked all of LTCM's bank creditors in a room and refused to let any of them leave until they had all agreed not only not to call up their loans but to put some more money in.