Soviet Debt

From the Moscow Times:
"$785Bln Soviet Debt Might Spoil Rating"

If all the outstanding debts of the Soviet Union were treated on par with the government’s other debts, that would significantly weaken the country’s balance sheet and trigger a sovereign credit rating review, Fitch said Tuesday. Credit rating agencies sat up and took notice when the European Court of Human Rights ordered the Russian government to pay damages to Yury Lobanov, 74, earlier this year in compensation for bonds he purchased in 1982, when Leonid Brezhnev was in power. Fitch was “not about to make any immediate judgment” that could affect Russia’s credit rating, said

But if the authorities stopped differentiating Soviet debts from post-Soviet ones, it would officially add 42 percent of gross domestic product to public debt and push total debt to 55 percent of GDP, Rawkins said at a conference in Moscow. There is approximately $785 billion worth of outstanding Soviet debts, according to the government. Rawkins said the real amount was “unquantifiable.” The reappearance of Soviet debt-related issues is potentially problematic for Russia’s sovereign rating, which determines the cost of borrowing on international markets. Top officials regularly cite the low level of state debt as one of the country’s macroeconomic strengths.

^ When the Russian Federation declared itself the sole successor to the Union of Soviet Socialist Republics in December 1991 it agreed to take the good and the bad that the USSR came with and this high debt is part of the bad. I'm curious to see what Fitch and other organizations decide. ^

http://www.themoscowtimes.com/business/article/785bln-soviet-debt-might-spoil-rating/468746.html