Moody's Takes Rating Action on 16 Russian Corporates

© AFP 2023 / EMMANUEL DUNANDA sign for Moody's rating agency is displayed at the company headquarters in New York
A sign for Moody's rating agency is displayed at the company headquarters in New York - Sputnik International
Moody's downgrades the ratings of 14 Russian non-financial corporates and their supported subsidiaries to Ba1 from Baa3.

LONDON/MOSCOW (Sputnik) — Moody's Investors Service said Wednesday it had downgraded to Ba1 from Baa3 the ratings of 14 Russian non-financial corporates and their supported subsidiaries.

The list of affected companies includes Gazprom, Rosneft, Lukoil, Novatek, Russian Railways, Norilsk Nikel, Uralkali, as well as MegaFon and MTS.

Moody's has also "downgraded the CFR and PDR of Russian Helicopters JSC to Ba3/Ba3-PD from Ba2/Ba2-PD, respectively."

At the same time, Moody's confirmed the Ba1 rating of one non-financial corporate, Severstal OAO, with a Ba1-PD PDR.

"The weakening of Russia's credit profile, as captured by Moody's downgrade of the sovereign and Russia's country ceilings to Ba1 from Baa3 with negative outlook, has prompted the rating actions on 16 non-financial corporates as they face an increasingly challenging domestic operating environment," the agency said in a statement.

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The agency also said that resilience of Russian non-financial corporates to the risks arising from the "prevailing negative operating conditions" in the domestic market was likely to be limited. It underscored, however, the willingness of Russian government to provide support to companies in the event of need.

The New York-based bond credit rating agency assigned a negative outlook to the ratings of all affected companies, except for those of Russian Railways JSC, Federal Passenger Company OJSC and Mobile TeleSystems OJSC. The three are on review for further downgrade.

This comes after Moody's cut Russia's sovereign debt rating to Ba1 last Friday, citing the situation in Ukraine and slumping oil prices. It then proceeded to downgrade seven Russian financial institutions on Tuesday, and also 15 regional and local governments, including Moscow, due to Russia's weakening credit profile.

Many experts have argued that the three major rating agencies have made biased judgements with regard to Russia based on the geopolitical situation.

Russia's Finance Ministry has stressed that the downgrades are based on an excessively pessimistic forecast, are politically motivated and do not reflect the real market situation.

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