Moody's upgrades debt to investment grade
Oct 09, 2003
MOSCOW - The international rating agency Moody's Investors Service has raised Russia's country ceiling for foreign currency bonds and notes and the ratings for all outstanding Eurobonds of the Russian Federation to Baa3 from Ba2, the agency reported.
Simultaneously, it raised the rating for ruble-denominated bonds to Baa3 and moved the ceiling for foreign currency bank deposits to Ba1 from Ba3. The ratings for so-called "Russian era" tranches of the Finance Ministry (tranches VI and VII) were raised to Ba1 from Ba3. The "Soviet era" tranche of the Finance Ministry (tranche V) was lifted to Ba2. The outlook on all ratings is stable.
According the Moody's classification, this is an investment grade rating. Perhaps, the two other leading rating agencies, S&P Õ Fitch, will also upgrade Russia's rating. This will allow Russia and Russian companies to borrow on foreign markets at a lower rate. The upgrade changed the situation on the bond market radically. The bonds that fell in early trading bounced back, having risen by 3-4 percent.
The move also had a positive impact on the stock market. LUKoil rose by more than 3 percent in the Russian Trading System as of 15:30 Moscow time on Wednesday, while Sberbank climbed 6 percent, and Surgutneftegaz went up by 4 percent. The RTS index rose 1.66 percent to 619.92 points.
In general, the granting of an investment grade rating is a very positive factor for the Russian stock market. So far, the downward trend on the market seems unlikely, and investors will certainly expect a new rally on the Russian stock market.
Simultaneously, it raised the rating for ruble-denominated bonds to Baa3 and moved the ceiling for foreign currency bank deposits to Ba1 from Ba3. The ratings for so-called "Russian era" tranches of the Finance Ministry (tranches VI and VII) were raised to Ba1 from Ba3. The "Soviet era" tranche of the Finance Ministry (tranche V) was lifted to Ba2. The outlook on all ratings is stable.
According the Moody's classification, this is an investment grade rating. Perhaps, the two other leading rating agencies, S&P Õ Fitch, will also upgrade Russia's rating. This will allow Russia and Russian companies to borrow on foreign markets at a lower rate. The upgrade changed the situation on the bond market radically. The bonds that fell in early trading bounced back, having risen by 3-4 percent.
The move also had a positive impact on the stock market. LUKoil rose by more than 3 percent in the Russian Trading System as of 15:30 Moscow time on Wednesday, while Sberbank climbed 6 percent, and Surgutneftegaz went up by 4 percent. The RTS index rose 1.66 percent to 619.92 points.
In general, the granting of an investment grade rating is a very positive factor for the Russian stock market. So far, the downward trend on the market seems unlikely, and investors will certainly expect a new rally on the Russian stock market.