Page 77 - RusRPTAug19

S&P
BBB- (S)
17/3/17
Russia’s credit ratings have been improving and all three ratings agencies have returned Russia to “investment grade” status (BBB- or more by S&P and Fitch, Baa3 by Moody’s).
Moody’s rates Russia at Baa3 with stable outlook on both its foreign and local currency debt.
Moody’s last upgraded Russia from Ba1 (Positive) in January 2018 as the economy started to emerge from several years of recession. The lowest rating the country had was B3 in August 2008 following the collapse of the ruble that year and technical default on the GKO state treasury bills. The highest the country has scored was Baa1 in March 2013 as economy bounced back from the 2008 crisis.
Fitch rates Ukraine at BBB- on both its foreign and local currency debt with no outlook indicated.
Fitch has been a lot more upbeat on Russia and has consistently ranked if with a treble B rating since 2004 of one sort or another, as it take more account of Russia rock solid fundamentals – the low external debt and large currency reserves. The lowest rating it had was CCC in August 2008 following the currency meltdown. The highest rating was Baa1 in March 2013 thanks to the economic rebound that year.
Standard & Poor’s (S&P) rates both Russia’s foreign debt at BBB- with stable outlook and the local debt at BBB.
S&P has also been fairly consistent on Russia’s rating. Its lowest grade was BB+ (negative) awarded in January 2015. The highest was BBB awarded in December 2008.
8.5 Fixed income
Russian corporate issuers placed $6.9bn worth of Eurobonds in 14 deals in January-June 2019, almost as much as $7.8bn in 18 issues placed in 2018 overall, Vedomosti daily said on July 31 citing a study by PwC. The average issue size is up to $494mn versus $460mn in 2018.
However, Russian issuers still lag behind the 2017 results, when a total of $20.6bn in Eurobonds was placed in 41 issues averaging $503mn.
This year the Finance Ministry also tapped the foreign debt market, already exceeding its $3bn Eurobond issuance plan for 2019. The ministry raised $2.5bn dollar-denominated Eurobonds maturing in 2029 and 2035 on June 20, following March placement of $3bn and €750mn.
Higher activity of large Russian issuers is attributed by PwC and analysts surveyed by Vedomosti to relative calm is sanction rhetoric after a turbulent 2018. A number of blue chip issuers in Russia also have recovered investment-grade ratings from all "big three" rating agencies.
At the same time Emerging Marking assets were in favour this year,
77 RUSSIA Country Report August 2019 www.intellinews.com