Moody Russia

From Yahoo:

"Russia cut to 'junk' by Moody's"

 

In a release late Friday, the ratings agency downgraded Russia's sovereign debt rating to Ba1/Not Prime (NP) from Baa3/Prime-3 (P-3). The rating outlook is negative. For Moody's, any bond rated Ba1 or lower is below investment grade, and considered a "junk" bond.  Friday's action from Moody's follows a move from S&P to cut Russia's rating to "junk" late last month.  In cutting its rating on Russia, Moody's cited the ongoing conflict in Ukraine, as well as the decline in oil prices and significant weakening of the Russia ruble this year as drivers of the downgrade. Moody's also said Russia's economic woes won't just disappear, saying it's " unlikely that the impact of recent events will be transitory." Moody's also cited unpredictable political dynamics, writing that there is a, " very low but rising risk that the international response to the conflict in Ukraine triggers a decision by the Russian authorities that directly or indirectly undermines timely payments on external debt service."

Moody's downgrade of Russia's government bond rating to Ba1 is driven by the following factors:

(1) The continuing crisis in Ukraine and the recent oil price and exchange rate shocks will further undermine Russia's economic strength and medium-term growth prospects, despite the fiscal and monetary policy responses;

(2) The government's financial strength will diminish materially as a result of fiscal pressures and the continued erosion of Russia's foreign exchange (FX) reserves in light of ongoing capital outflows and restricted access to international capital markets;

(3) The risk is rising, although still very low, that the international response to the military conflict in Ukraine triggers a decision by the Russian authorities that directly or indirectly undermines timely payments on external debt service.

 

^ This didn't come as a surprise, but it's still not good. ^

http://finance.yahoo.com/news/moodys-cuts-russia-junk-213610047.html