Ratings and Rankings for Russia
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Last updated: September 27, 2017
Moody’s group represents one of the leading credit rating agencies in the world with head office in New York City. It comprises Moody's Investors Service Inc., Moody’s Analytics Inc. and their affiliates. Together with other credit ratings, Moody’s elaborates and releases its sovereign credit ratings on government bonds accompanied by country credit ratings ceilings and outlooks.
Moody’s web-site: https://www.moodys.com
Moody’s offers the following key indicators for the sovereign risk assessment:
- Government bonds ratings for both foreign and local currency. Long-term government bonds rating is the major Moody’s sovereign risk indicator.
- Country rating ceilings for (1) Bonds & Notes and (2) Bank Deposits for both foreign and local currency. The ceilings indicate the highest rating that can be granted to securities or bank deposit obligations in a specific country.
- Outlook that addresses projected developments of specific ratings for a country.
Rating Scale of Moody’s
Long-Term Sovereign Rating Scale
|Aaa||Highest quality of obligations||Investment||Lowest level of credit risk.|
|Aa||High quality of obligations||Investment||Very low credit risk.|
|A||Upper-medium grade of obligations||Investment||Low credit risk.|
|Baa||Medium grade of obligations||Investment||Moderate credit risk, certain speculative characteristics of obligations.|
|Ba||Speculative grade||Speculative||Substantial credit risk.|
|B||Speculative grade||Speculative||High credit risk.|
|Caa||Speculative of poor standing||Speculative||Very high credit risk.|
|Ca||Highly speculative||Speculative||Obligations are likely to be in or very near default, with some prospect of recovery of principal and interest.|
|C||Lowest rated||Speculative||Obligations are typically in default with little prospect for recovery of principal or interest.|
In most cases modifiers (1, 2 or 3) may be appended to a rating in order to indicate relative status within major rating categories: “1” stands for the higher end of category (best grade in category), “2” stands for the medium end, and “3” stands for the lower end. Example: Baa1 means the best grade within Baa category.
Short-Term Sovereign Rating Scale
|P-1||Prime-1||Superior ability to repay short-term debt obligations.|
|P-2||Prime-2||Strong ability to repay short-term debt obligations.|
|P-3||Prime-3||Acceptable ability to repay short-term obligations.|
|NP||Not Prime||Issuer does not fall into any of categories above.|
Additional information on the Moody’s rating scale can be found at:
https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004 (registration required).
The sovereign bonds rating methodology relies upon analysis of the following factors:
- The country’s economic strength (growth dynamics, scale of the economy, national income and adjustment factors);
- The country’s institutional strength (institutional framework and effectiveness, policy credibility and effectiveness and adjustment factor);
- The country’s fiscal strength (debt burden, debt affordability and adjustment factors);
- The country’s susceptibility to event risk (political risk, government liquidity risk, banking sector risk, external vulnerability risk).
The additional information on Moody’s ratings methodology can be found at:
https://www.moodys.com/Pages/HowMoodysRatesSovereigns.aspx (registration required).
Moody’s Sovereign Ratings for Russia
Moody’s initially assigned sovereign rating to Russian debt in October 1996.
The assigned ratings, ceilings and outlooks were revisited many times both before and after August 1998 crisis, when the Russian state defaulted.
Over 1999-2008 the long-term government bonds rating for Russia was gradually improving in line with Russian economic strength reaching Baa1 investment grade in July, 2008.
In the course of 2008-2009 crisis the rating was not revisited primarily due availability of substantial reserves for the Russian debt coverage.
After the beginning of events in Ukraine in March 2014 the long-term government bonds rating was put for downgrade review, and in October 2014 it was lowered to Baa2.
Afterwards, it was further lowered to Baa3 (January 2015) and Ba1 (February 2015) reflecting deterioration of the Russian economy’s status and prospects accompanied by increasing political tensions.
The last rating action on Russia was made by Moody’s on December 3, 2015, when the outlook for Ba1 long-term government bonds rating was changed from negative to stable.
Thus, at present the Moody’s sovereign rating for Russia is one category below the investment grade.
On March 4, 2016 Moody’s placed the Russian sovereign rating on review for downgrade to Ba2, which may be implemented within the following two months with high level of probability together with reassessment of the country ceilings.
On April 22, 2016 Moody’s confirmed the sovereign rating of Russian government bonds at Ba1 with negative outlook assigned.
On February 17, 2017 the outlook for government bonds’ rating (Ba1) was changed from negative to stable.
Recent changes in relation to Moody’s sovereign ratings for Russia can be traced at:
Moody’s Retrospective Ratings for Russia
|Date||Rating ||Foreign Currency Ceilings||Government Bonds||Outlook|
|Bonds & Notes||Bank Deposits||Foreign currency||Local currency|
|October 7, 1996||Rating assigned||Ba2||NP||Ba3||NP||-||-||-|
|November 22, 1996||Rating assigned||-||-||-||-||Ba2||-||-|
|March 7, 1997||Outlook assigned||-||-||-||-||-||-||stable|
|January 15, 1998||Outlook changed||-||-||-||-||-||-||negative|
|February 3, 1998||Review for downgrade||-||-||-||-||Ba2||-||RUR-|
|March 11, 1998||Rating lowered||Ba3||-||B1||-||Ba3||-||stable|
|May 29, 1998||Rating lowered||B1||-||B2||-||B1||-||negative|
|May 29, 1998||Rating assigned||-||-||-||-||-||B2||-|
|August 13, 1998||Rating lowered||B2||-||Caa1||-||B2||Caa1||negative|
|August 21, 1998||Rating lowered||B3||-||Caa3||-||B3||Ca||negative|
|September 14, 1998||Rating lowered||-||-||Ca||-||-||-||-|
|September 17, 1999||Rating raised||-||-||Caa1||-||-||-||-|
|January 5, 2000||Rating raised||-||-||-||-||-||Caa2||stable|
|April 10, 2000||Outlook changed||-||-||-||-||-||-||positive|
|August 23, 2000||Review for upgrade||B3||-||Caa1||-||B3||Caa2||RUR+|
|November 13, 2000||Rating raised||B2||-||B3||-||B2||B3||stable|
|September 5, 2001||Outlook changed||-||-||-||-||B2||B3||positive|
|October 11, 2001||Rating raised||-||-||-||-||-||B1||-|
|November 29, 2001||Rating raised||Ba3||-||B1||-||Ba3||Ba2||stable|
|April 14, 2002||Outlook changed||-||-||-||-||-||-||positive|
|October 17, 2002||Review for upgrade||Ba3||-||B1||-||Ba3||-||RUR+|
|December 17, 2002||Rating raised||Ba2||-||Ba3||-||Ba2||-||stable|
|July 28, 2003||Review for upgrade||-||-||-||-||Ba2||Ba2||RUR+|
|October 8, 2003||Rating raised||Baa3||-||Ba1||-||Baa3||Baa3||stable|
|October 30, 2003||Rating confirmed||-||NP||-||NP||Baa3||Baa3||stable|
|October 6, 2004||Outlook changed||-||-||-||-||-||-||positive|
|September 8, 2005||Review for upgrade||-||NP||Ba1||NP||Baa3||Baa3||RUR+|
|October 25, 2005||Rating raised||Baa2||Prime-2||Baa2||Prime-2||Baa2||Baa2||Stable|
|May 24, 2006||Rating raised||A2||Prime-1||-||-||-||-||-|
|March 27, 2008||Review for upgrade||-||-||Baa2||-||Baa2||Baa2||RUR+|
|July 16, 2008||Rating raised||-||-||Baa1||-||Baa1||Baa1||-|
|July 16, 2008||Outlook changed||-||-||-||-||Baa1||Baa1||positive|
|December 12, 2008||Outlook changed||-||-||-||-||Baa1||Baa1||stable|
|March 27, 2013||Rating confirmed||A2||-||Baa1||-||Baa1||Baa1||stable|
|March 28, 2014||Review for downgrade||-||-||-||-||Baa1||Baa1||RUR-|
|June 27, 2014||Outlook changed||-||-||-||-||Baa1||Baa1||negative|
|October 17, 2014||Rating lowered||A3||Prime-2||Baa2||-||Baa2||Baa2||negative|
|December 22, 2014||Ceilings lowered (no rating action)||Baa2||-||Ba1||NP||-||-||-|
|January 16, 2015||Rating lowered||Baa3||Prime-3||-||-||Baa3||Baa3||RUR-|
|February 20, 2015||Rating lowered||Ba1||NP||Ba2||NP||Ba1||Ba1||negative|
|December 3, 2015||Outlook changed||-||-||-||-||Ba1||Ba1||stable|
|March 4, 2016||Review for downgrade||-||-||-||-||Ba1||Ba1||RUR-|
|April 22, 2016||Outlook changed||-||-||-||-||Ba1||Ba1||negative|
|February 17, 2017||Outlook changed||-||-||-||-||Ba1||Ba1||stable|
Sources: Economics and Business department of the Roeters Island Library of the University of Amsterdam (1996-2008); Moody’s press releases: March 27, 2013, March 28, 2014, June 27, 2014, October 17, 2014, December 22, 2014, January 16, 2015, February 20, 2015, December 3, 2015, March 4, 2016, April 22, 2016, February 17, 2017.