Page 71 - RusRPTFeb20

8.4 ​International ratings
Russia - Rating agency
as of January 1, 2020
last change
Moodys (USD rating)
Baa3 (S)
02/08/19
Fitch (USD rating)
BBB (N)
09/08/19
S&P
BBB- (S)
23/02/18
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).
S&P affirmed Russia’s rating at BBB- with stable outlook in January ​citing risks of tighter international sanctions, mostly from the US, while praising strong policy framework shielding Russia from external shocks. In the opinion of S&P negative rating action is possible if geo-political tensions lead to materially tighter sanctions on Russia. S&P has 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.
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.
8.5 ​Fixed income
The Russian Ministry of Finance ruble-denominated OFZ treasury bills market continued to grow in 2019​, with the total volume of T bills outstanding rising from RUB1,790bn in January 2019 to RUB2,850bn as of the end of December, according to Ministry of Finance data.
The RUB1,060bn of new bills the Ministry issued in 2019 was heavily bought by foreign investors, which saw their share of outstanding bills rise to 31.9% of the total outstanding bonds, as of the end of December, but still short of the all time high of 34.5% set in April 2018.
The marked sell off in OFZ by foreigners in the first half of 2018, which took their share down to a low of 24.4% in January 2019, has reversed, but the pace of growth has not been quiet as fast as in the previous rally that ran between the start of 2015 and the summer of 2018.
The Ministry of Finance will continue issuing bonds at the same pace this year and the budget allows for up to circa RUB1,500bn worth of OFZ to be issued.
The domestic bond market got off to a good start in January 2020 with foreigners buying over $1bn of Russian securities​. At the same time domestic
71​ RUSSIA Country Report​ February 2020 ​ ​www.intellinews.com