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Ratings and Rankings for Russia

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Last updated: July 15, 2017


About Fitch Ratings

Rating Scale of Fitch Ratings

Fitch Sovereign Ratings for Russia

Fitch Retrospective Ratings for Russia




About Fitch Ratings



Fitch Ratings elaborates and releases internationally recognised credit ratings for issuers and obligations in corporate, public and structured finance debt markets. Those ratings assess the capacity to meet commitments using comparable and globally applicable scale.

Fitch Ratings web-site: https://www.fitchratings.com/

Fitch offers the following range of key indicators involved in sovereign (country) risk assessment with major indicator being Issuer Default Rating (IDR) that reflects a country’s relative vulnerability to default on financial obligations:

Important note: local currency ratings measure repayment probability in currency of an issuer’s jurisdiction and, therefore, do not address Transfer and Convertibility risk.

Important note #2: On December 26, 2016 Fitch decided to withdraw the national scale ratings for Russia (approx. 150 ratings) accomplishing the process by March 31, 2017. This decision resulted from changing regulations on operations of international rating agencies in Russia making their ratings ineligible for regulatory purposes starting from July 14, 2017. Fitch was the second rating agency belonging to the Top 3 (after Moody’s and before S&P) to withdraw the national-scale ratings in Russia. The sovereign ratings for Russia and international scale ratings for Russian issuers (approx. 200 ratings) remained in place. Press-release of Fitch (cbonds.ru): Original (Eng).



Rating Scale of Fitch Ratings



Long-Term Sovereign Rating Scale

The following scale is used for sovereign issuer long-term ratings by Fitch:

SymbolsDescriptionGradeComments
AAAHighest credit qualityInvestmentLowest risk of default. The payment capacity is highly unlikely to be affected by foreseeable events.
AAVery high credit qualityInvestmentVery low risk of default. The payment capacity is not significantly vulnerable to foreseeable events.
AHigh credit qualityInvestmentLow risk of default. Strong capacity of payment of financial commitments.
BBBGood credit qualityInvestmentLow current expectations of default risk. Adequate payment capacity that can be influenced by changing economic and business conditions.
BBSpeculativeSpeculativeElevated vulnerability to default risk, material default risk exists with a limited margin of safety. Vulnerability to default risk in the case of adverse changes in business or economic conditions, still with sufficient business or financial flexibility supporting meeting financial commitments.
BHighly speculativeSpeculativeMaterial default risk exists with a limited margin of safety. Financial commitments are currently met, but capacity for further payments is vulnerable to deteriorating economic conditions.
CCCSubstantial credit riskSpeculativeDefault is a real possibility.
CCVery high levels of credit riskSpeculativeDefault of some kind appears probable.
CExceptionally high levels of credit riskSpeculativeDefault is imminent or inevitable, or the issuer is in standstill. This includes the following issuer statuses: (1) issuer has entered into a grace or cure period after non-payment, (2) issuer has entered into a temporary negotiated waiver or standstill agreement after a payment default, and (3) Fitch otherwise believes a RD or D status to be imminent or inevitable.
RDRestricted defaultSpeculativeIssuer has experienced an uncured payment default on obligation but has not entered into bankruptcy
DDefaultSpeculativeIssuer has entered into a formal bankruptcy procedure.

In most cases modifiers (”+” or “-“) may be appended to a rating in order to indicate relative status within major rating categories.

BBB- rating is generally considered to be the lowest level of investment grade, while the ratings below are typically referred as speculative / “junk” grade ratings.

Short-Term Sovereign Rating Scale

The following scale is used for sovereign issuer short-term ratings by Fitch:

SymbolsDescriptionGradeComments
F1Highest short-term credit qualityInvestmentStrongest capacity for timely payment, sometimes “+” modifier is also used for exceptional strength.
F2Good short-term credit qualityInvestmentGood capacity for timely payment.
F3Fair short-term credit qualityInvestmentAdequate capacity for timely payment.
BSpeculative short-term credit qualitySpeculativeMinimal capacity for timely payment with increased vulnerability to near term adverse changes in financial and economic conditions.
CHigh short-term default riskSpeculativeDefault is a real possibility.
RDRestricted defaultSpeculativeIssuer has defaulted on one or more of its financial commitments, although it continues to meet other financial obligations.
DDefaultSpeculativeDefault event.

Detailed explanations on the Fitch Rating scale (including limitations, relationship between short-term and long-term ratings, etc.) can be found at:

https://www.fitchratings.com/site/definitions/internationalratings.html



Fitch Sovereign Ratings for Russia



Fitch released its first Issuer Default Rating (IDR) for the Russian Federation on October 7, 1996.

In the course of 1998 the Fitch rating for Russia was numerously reviewed reflecting rapidly deteriorating economic environment before August 1998 crisis.

After 1998 the long-term IDR of Russia was gradually improving reaching its maximum at BBB+ in 2006-2008.

The next crisis of 2009 had not substantially increased default probability of Russia due to sufficient country reserves and, therefore, IDR did not overcome dramatic changes settling at the level of BBB.

The events in Ukraine in 1Q 2014 forced Fitch to review the Russian IDR outlook to negative, and the rating was consequently reviewed to BBB- in January 2015 with negative outlook.

On October 16, 2015 the long-term IDR for Russia was changed to BBB- with negative outlook that is the minimal standing of the investment grade.

It is noticeable that as of February 2016 Fitch was the only rating agency from the Top 3, which maintained the long-term rating of Russia at investment grade (S&P and Moody’s lowered Russian sovereign rating to “junk” grade in 2015).

On April 15, 2016 Fitch affirmed the Russian IDR at BBB- with negative outlook.[38]

On July 22, 2016 Fitch applied its recent criteria changes to ratings of Russia.[39] The agency affirmed Russia's Long-Term Local Currency (LTLC) IDR at BBB- with negative outlook. The Short-Term Foreign Currency (STFC) IDR was affirmed at F3 and a new Short-Term Local Currency (STLC) IDR of F3 was assigned.

On October 14, 2016 Fitch revised the Russian IDR changing the outlook from negative to stable and affirming the long-term foreign and local currency ratings at BBB-.[40]

On March 31, 2017 Fitch affirmed Russian IDRs at BBB- with stable outlook.[41]

The next review date of the Russian sovereign rating will be September 22, 2017.



Fitch Retrospective Ratings for Russia



Fitch IDR History for Russia in 1996-2016

Date of reviewForeign Currency RatingLocal Currency RatingCountry Ceiling
Long-termShort-termOutlookLong-termShort-termOutlook
October 7, 1996BB+B-----
February 12, 1998BB+Bnegative--negative-
March 10, 1998BB+B-----
June 5, 1998BB+Bnegative--negative-
June 7, 1998BBBnegative--negative-
July 30, 1998BB-B-----
August 17, 1998B-Bnegative--negative-
August 27, 1998CCCC-----
February 14, 2000CCCCpositive--positive-
May 8, 2000B-B-----
August 29, 2000BB-B----
September 21, 2000BBstableB--stable-
July 17, 2001BBpositiveB--positive-
October 4, 2001B+BstableB-stable-
May 2, 2002BB-BpositiveBB--positive-
May 13, 2003BB+BstableBB+-stable-
November 18, 2004BBB-F3stableBBB--stable-
August 3, 2005BBBF3stableBBB-stable-
July 25, 2006BBB+F2stableBBB+-stable-
November 9, 2008BBB+F2negativeBBB+-negative-
February 4, 2009BBBF3negativeBBB-negative-
January 22, 2010BBBF3stableBBB-stable-
September 8, 2010BBBF3positiveBBB-positive-
January 16, 2012BBBF3stableBBB-stableBBB+
January 31, 2014BBBF3stableBBB-stableBBB+
March 21, 2014BBBF3negativeBBB-negativeBBB+
January 9, 2015BBB-F3negativeBBB--negativeBBB-
July 3, 2015BBB-F3negativeBBB--negativeBBB-
October 16, 2015BBB-F3negativeBBB--negativeBBB-
April 15, 2016BBB-F3negativeBBB--negativeBBB-
July 22, 2016BBB-F3negativeBBB-F3negativeBBB-
October 14, 2016BBB-F3stableBBB-F3stableBBB-
March 31, 2017BBB-F3stableBBB-F3stableBBB-

Sources: Credit Writedowns[42] (1996-2010); press releases of Fitch Ratings: January 16, 2012[43], January 31, 2014[44], March 21, 2014[45], January 9, 2015[46], July 3, 2015[47], October 16, 2015[48], April 15, 2016[49], July 22, 2016[50], October 14, 2016[51], March 31, 2017[52].



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