Downgrading Russia’s Credit Rankings Illogical - Chinese Rating Agency

MOSCOW (Sputnik) — The logic that western rating agencies follow when downgrading Russian companies' ratings is faulty, the president of Chinese credit rating agency Dagong Global, Guan Jianzhong, told Sputnik on Friday.

Earlier in February, Dagong gave Russian energy giant Gazprom the highest AAA rating with a stable outlook. Meanwhile, leading Western agencies Moody's, S&P and Fitch, lowered the ratings of several major Russian companies, including Gazprom, following the downgrading of Russia's sovereign rating to junk or near-junk status.

"The 'big three' agencies downgraded Gazprom's rating in light of Russia's rating downgrade, the logic behind it being that a company cannot have a credit rating higher than the sovereign rating of the country. Such an approach is faulty," Jianzhong told Sputnik.

Jianzhong said that a country's credit standing was rarely linked to the financial situation of a particular company.

In January, Dagong decided to leave its high A credit rating of Russia, despite sanctions imposed on the country by Western nations.

Russia and China are cooperating on the Universal Credit Rating Group (UCRG) project, which was set up in 2013 as a partnership between Dagong, Russia's RusRating and US rating company Egan-Jones to become an alternative to the Western "big three" rating agencies.