[London 6th Archyde.com]–Moody’s downgraded Russia’s rating by two levels to “Ca” on the 6th. The central bank’s capital restrictions limit the payment of external debt, and it is highly likely that it will default.
Moody’s pointed out “serious concerns about Russia’s willingness and ability to pay debt.”
The central bank suspended the payment of ruble-denominated government bond (OFZ) coupons to foreign investors last week. The deadline has not been disclosed.
Also on the 6th, domestic creditors and creditors from countries not participating in sanctions against Russia will pay in rubles at the exchange rate at the time of payment.
Creditors may be paid in the debt-issuing currency with special permission.Foreign creditors are credited in rubles to a special account managed by central bank rules
The 16th is the interest payment date of $ 107 million with two euro-denominated bonds.
Moody’s points out that the risk of default is increasing and foreign holders are likely to be able to recover only part of their investment. “The recovery rate is likely to be in line with historical averages for Ca rating, expected to be 35-65%,” she said.
Until recently, Moody’s, Fitch and S & P Global had rated Russia as investment grade, but have downgraded it to junk one after another. S & P is CCC minus, Fitch is B and the outlook is negative, and further downgrade is expected.