S&P decision on Russia’s sovereign rating is ahead of Economy Ministry's expectations

March 20, 2017 - ТАСС

 

The decision by the international rating agency S&P to raise the outlook for Russia's sovereign rating outstripped the expectations of Russia’s Economic Development Ministry, Minister Maxim Oreshkin told reporters.

He said that the recent discussion between the ministry and the agency experts contributed to the decision to raise Russia’s rating.

"Previously, we met with S&P analysts, we told them about our plans, the current economic dynamics, the government's forecasts and actions aimed at preparing a plan to increase the economy's growth rate, which affected their expectations and helped to make a decision about a positive outlook earlier than we expected," Oreshkin said.

He added that completion of the plan on structural changes and the beginning of the plan’s implementation were necessary conditions for raising the rating to investment level this year.

On Friday, S&P raised the outlook for Russia's sovereign credit rating to "positive" from "stable", confirming its long-term foreign currency credit rating at "BB +", according to the agency’s press release.

At the same time, the long-term credit rating in the national currency was affirmed at "BBB-".

The agency noted that the revision of the rating outlook reflects the expectation that Russia's GDP will return to the growth trajectory and the Russian economy will continue to adapt to low oil prices while maintaining a relatively low level of public debt in the period from 2017 to 2020.
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Cbonds page: Russia
Issuer profile:

The Russian Federation is a sovereign and democratic federal state, consisting of 83 sub-federal political units. Russia is the largest country in the world by land mass, covering 17.1 million square kilometres. Russia borders 16 countries and spans nine time zones, extending some 9,000 kilometres from the Baltic Sea in the west to the Pacific Ocean in the east and some 4,000 kilometres from its southern border on the Black and Caspian Seas to its northern limits on the Arctic Ocean.

Russia is rich in natural resources. It is the world’s second-largest producer of natural gas, the world’s leading producer of oil and a significant producer of coal, uranium, nickel, palladium and platinum. As of 1 January 2009, Russia’s A, B and C1 natural gas reserves (which include explored reserves considered to be fully extractable pursuant to the Russian reserves system) were estimated at 47.8 trillion cubic metres.The country also has substantial gold deposits (located mainly in Eastern Siberia and the Russian Far East) as well as significant deposits of zinc, lead, tin, silver, other rare metals and precious and semiprecious stones. Russia is among the world’s leading producers of electricity, steel, fertilisers, cotton textiles and other goods. Forests cover approximately 52% of Russia’s total land area, and Russia’s timber reserves, the largest of any country, are estimated at 83.3 billion cubic metres.

Russia is home to approximately 143 million people, ranks ninth in the world by population and has a population density of approximately 8.3 persons per square kilometre. Roughly 79% of the population lives in European Russia, and approximately the same percentage of Russia’s population lives in cities. Russia’s capital and largest city is Moscow with 11.5 million inhabitants, and 11 other Russian cities have a population of more than one million residents.

Outstanding issues:
52 issuesRUB8,834,065,888,000
12 issuesUSD47,684,574,656
1 issuesEUR750,000,000
Issuer rating:
RIA RatingBBB+/StableSovereign ratings09/04/2015
Dagong CreditA/StableInternational scale rating (foreign curr.)09/22/2016
Dagong CreditA/StableInternational scale rating (local curr.)09/22/2016
Organisation for Economic Co-operation and Development (OECD)4/Country Risk Classifications06/24/2016
Rating-Agentur Expert RABBB-/Rating scale of the creditworthiness of sovereign governments (SGC) -National currency07/14/2017
Rating-Agentur Expert RABBB-/Rating scale of the creditworthiness of sovereign governments (SGC) - Foreign currency07/14/2017
Rating-Agentur Expert RABBB-/Rating scale of the country credit environment (CCE) rating - National currency07/14/2017
Rating-Agentur Expert RABBB-/Rating scale of the country credit environment (CCE) rating - Foreign currency07/14/2017
Moody's Investors ServiceBa1/StableLT- foreign currency02/17/2017
Moody's Investors ServiceBa1/StableLT- local currency02/17/2017
S&P Global RatingsBB+/PositiveForeign Currency LT03/17/2017
S&P Global RatingsBBB-/PositiveLocal Currency LT03/17/2017
S&P Global RatingsNR/LT National Scale (Russia)06/02/2017
Fitch RatingsBBB-/StableLT Int. Scale (foreign curr.)03/31/2017
Fitch RatingsWithdrawn/National Scale (Russia)09/02/2011
Fitch RatingsBBB-/StableLT Int. Scale (local curr.)03/31/2017
Rating Agency RAEX (Expert RA)Withdrawn/Foriegn curr. scale07/04/2016
Rating Agency RAEX (Expert RA)Withdrawn/Local curr. scale07/04/2016
National Rating AgencyiBBB/StableGlobal scale09/30/2016
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