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Moody's Downbeat on Moscow and St. Petersburg

Published: July 2, 2014 (Issue # 1818)



  • The two cities' overall negative outlook directly reflects the state of Russia's sovereign bond rating, which Moody's set at Baa1 with a negative outlook on Friday.
    Photo: Sergei Porter / Vedomosti

International credit ratings agency Moody's has struck Moscow and St. Petersburg with negative outlooks, saying that Russia's own poor ratings prospects have spread to its metropolitan centers.

Moody's simultaneously confirmed the two cities' foreign and local currency issuer ratings and senior unsecured ratings at Baa1.

The two cities' overall negative outlook directly reflects the state of Russia's sovereign bond rating, which Moody's set at Baa1 with a negative outlook on Friday, the agency said in a statement Tuesday.

The cities' ratings nonetheless take into account "a moderate probability of extraordinary support coming from the federal government if the cities were to face acute liquidity stress," the statement said.

While Russia's two largest cities saw their outlooks turn negative, Moody's announced 14 other regions stable, an indication of their ability to "withstand moderate systemic pressure," the statement said.

The regions will be able to manage short-term refinancing risks thanks to assistance from the national government and ongoing lending from state-owned banks, Moody's said.

The ratings for the Krasnodar, Belgorod and Volgograd regions, meanwhile, were affirmed with negative outlooks, based on expected deterioration of their key financial and debt metrics.

With its announcement Friday, Moody's became the last of the world's three main rating companies to assign a negative outlook to Russia's sovereign bond rating.

The agency cited Russia's increased susceptibility to geo-political risk — caused by the escalation of the Ukraine crisis — and weak mid-term economic growth outlook as bases for the decision.

However, the agency did not decide to lower Russia's rating, saying that the current level of geo-political tensions over Ukraine will not be enough to further suppress the country's economic growth.





 


ALL ABOUT TOWN

Wednesday, July 23


SPIBA’s Legislation & Lobbying Committee invites everyone interested in the practical aspects of courts and procedural law to today’s Legal Debating Club at 9:30 a.m. at the Mertens House, 21 Nevsky Prospekt, office 506. Visit spiba.ru for more details.


Take advantage of the sunny summer days and participate in Beach Games 2014, which runs through July 27 in Sestroretsk’s Dubki Park.



Thursday, July 24


Liliana Modiliani, a well-known Russian stylist, will talk about choosing clothes that fit during her lecture at 7 p.m. at the Pryamoy Efir art club, 13 Viborgskoe Shosse.



Friday, July 25


Discuss Russia’s economic and political prospects for 2014 during a Business Breakfast organized by SPIBA at 9.30 a.m. in the Bank Saint-Petersburg office at 64


Malookhtinsky Prospekt.


Start your weekend with adorable miniature pigs at the Squealing Pig festival at 7 p.m. this evening in the Karl & Friedrich restaurant, 15 Iozhnaya doroga, on Krestovsky Island.



Saturday, July 26


Hundreds of brand-new and retro cars, drag and drift shows, test drives and karting are planned for the Avtobum-2014 festival, which will take place in front of the RIO shopping center at 2 Fuchika Ulitsa.


Participants in today’s SaniDay Summer competition will impress visitors with their hand-made, unusual and hilarious boats, which will race at the Igora Resort near the 54th kilometer on Priozerskoe Shosse.


Metro Family Day will include both serious lectures for adults and master-classes for children, making the event interesting for the whole family. To participate, come to Kirov Park on Yelagin Island.


Photography will be the focus of today’s Photosubbota, which features lectures by famous photographers, meetings with photo schools and studio representatives, and participation in a photography competition. The event starts at noon at Petrokongress, 5 Lodeynopolskaya Ulitsa.


If you like cycling, make sure to visit the Za Velogorod Festival with its retro bike exhibition, market and live music. The second round of the Leningrad Criterium race will also take place during the event at Petrovsky Arsenal in Sestroretsk.



Sunday, July 27


Navy Day will be celebrated with a weapon and military transportation exhibition, self-defense master classes and concerts. The event starts at 1 p.m. in the 300th Anniversary Park of St. Petersburg.



Monday, July 28


Don’t miss a chance to see the latest achievements in robotics during the RoboDom interactive show, exhibiting more than 150 robots. The show will be at BUM center, 22/2 Gzhatskaya Ulitsa, until Aug. 3. The entrance ticket costs 350 rubles ($10).



Tuesday, July 29


A video of a Queen concert from 1986 will be shown today at 8 p.m. in Yaschik, 50/13 Ligovsky Prospekt.



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