Moody’s improves the outlook on 12 Russian companies


Translated by Ollie Richardson for Fort Russ

7th December, 2015


International ratings Agency Moody’s changed the forecast on 12 Russian companies, to stable from “negative”.

This was reported in the press release of the Agency.

In particular, they improved the outlooks on the ratings of Atomenergoprom, FGC UES, “JSC IDGC of Center and Volga region”, “IDGC of Ural”, “IDGC of Volga”, “inter RAO”, Lenenergo, MOESK, “Novorossiysk sea trading port”, “Transneft”, Russian grids and RusHydro.

This action follows the improvement of the outlook on the government bond ratings to “stable”  on the 3rd December.

Moody’s also improved the outlook on corporate family of Tatneft, the rating itself being affirmed as “Ba1”.

The change of the Outlook on government bonds

As was reported by Moody’s, the Outlook change on the government bonds was due to the stabilisation of the external finance of the Russian Federation, which occurred as a result of macroeconomic adjustments that helped soften the impact of declining oil prices.

In addition, the change in outlook was influenced by factors such as the decreased likelihood of intense “shock”, for example, from additional international sanctions that could be applied in Economics and Finance in the next 12-18 months.

“Given the reduction of tensions in the situation in the East of Ukraine, the decreased likelihood of further sanctions… At the same time, we do not expect that existing sanctions will be lifted as the parties to the conflict will not be ready to demonstrate full readiness to comply with the terms of the Minsk agreements”, – Moody’s said in a statement.

Potential growth rates of Russia’s economy is estimated by the Agency at 1-5%. Among the factors that slowed the rate of growth of the Russian economy are low oil prices and lack of investment.

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