Page 91 - RusRPTMay20

At the same time, Fitch has downgraded to 'BB-' from 'BB' the tier 2 subordinated debt ratings of Alfa and SCB, and affirmed the tier 2 subordinated debt ratings of CBM (at B+) and Sberbank of Russia (at BBB-). These ratings have been removed from Under Criteria Observation (UCO).
Fitch has also affirmed Bank Avers' 'BB' Long-Term IDR with a Stable Outlook, as the agency views its financial profile as somewhat more resilient to the economic downturn.
8.5 ​Fixed income
Foreign investors sold more than $3.5bn worth of Russian government bonds in March, ​as the coronavirus caused unprecedented panic. Data from the Moscow Exchange shows non-residents reduced their holdings of OFZs by a record RUB284bn ($3.63bn) over the month, Russian daily Vedomosti reported​. The sell-off was the largest ever recorded in a single month more than doubling the previous high of RUB141bn in June 2018, when the US leveled fresh sanctions against Russia. In total, non-residents sold more than 10% of all OFZs which were on their books, reducing their share of total holdings from a previous all-time high of almost 35% to 31.2%.
The share of foreign holders of Russia’s OFZ treasury bonds was at 30.9% as of April 10​, declining by 3.2 percentage points since early March, the central bank said on April 16. Russian major banks helped to support the OFZ market during the recent period of turbulence, the central bank said.
Russia’s Finance Ministry will offer RUB450bn ($5.9bn) worth of ruble-denominated OFZ treasury bills treasury bonds maturing in September 2030 when market conditions are favourable. ​Currently the weekly auction were suspended in March due to the high volatility caused by the double whammy of the collapse in the price of oil and the stop-shock from the spread of the pandemic.
The​ ​auction of March 4 was called off due to the Coronavirus epidemic​ and have not been resumed since then. The​ c​ ollapse of the Opec+ talks and the drop in oil prices​ had amplified market turbulence. However, the ministry says that it has already raise most of the money anticipated in the budget for the first quarter: the Finance Ministry raised RUB500bn in OFZ auctions out of RUB600bn budgeted. The ministry commented that despite suspending the auctions it has necessary resources to carry out its budget obligations. So far the Russian domestic bond market has been holding up well and has not seen large outflows, associated with most emerging markets. With its rock solid macro-fundamentals some analysts have called Russia a safe haven during the current volatility.
91​ RUSSIA Country Report​ May 2020 ​ ​www.intellinews.com