Page 93 - RusRPTJun19

8.4 International ratings
Russia - Rating agency
as of May 1, 2018
last change
Moodys (USD rating)
Baa3 (S)
25/1/18
Fitch (USD rating)
BBB- (S)
22/7/16
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
The Finance Ministry feels extremely comfortable with 56% of the annual borrowing plan (as per to-be-amended budget) already executed and isn’t ready to give up much of yield premium.
Foreigners currently hold over $50bn in Russian ruble- and FX- denominated sovereign debt. This is a marked contrast from last year, when foreigners withdrew almost $10bn in ruble-denominated Russian bonds after the US imposed new sanctions. In the first months of 2019, MinFin has sold more debt than in all of 2018. Several large US investors, such as Blackrock and the California State Pension Fund, hold billions in Russian state debt.
93 RUSSIA Country Report June 2019 www.intellinews.com