Russia’s long-term issuer and senior unsecured debt ratings were lowered from B3 to Ca with a negative outlook by Moody’s Investors Service on expectations that the Bank of Russia’s capital controls will limit cross-border payments, including debt servicing on government bonds.
The change comes less than a week after Moody’s stripped Russia of its investment grade rating and downgraded Russia’s credit rating to B3 on March 3.
The downgrade “is therefore being driven by serious concerns about Russia’s willingness and ability to service its debt obligations,” Moody’s said in a statement Sunday.
“Moody’s believes that the risk of default has increased significantly and that the likely recovery for investors will be in line with historical averages, equivalent to a Ca rating.” Recovery expectations are 35 to 65 percent, it said.
The decision is supported by a reported statement from the National Settlement Depository that coupon payments on OFZ Treasury bonds due March 2 were only paid to local holders of the bonds, it said.
Moody’s announced the change hours after President Vladimir Putin signed a decree allowing the Russian government and Russian companies to pay foreign creditors in rubles to stave off defaults while capital controls remain in place.
https://www.independent.ie/business/world/moodys-cuts-russias-rating-deeper-into-junk-territory-41416949.html Moody’s cuts Russia’s rating deeper into junk territory