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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

Friday, Oct. 31


Put your grammar and logical thinking to the test in a fun and friendly environment during the British Book Center’s Board Game Evening starting at 5 p.m. today. The event is free and all are welcome to attend.



Saturday, Nov. 1


The men and women who dedicate their lives to fitness get their chance to compete for the title of best body in Russia at today’s Grand Prix Fitness House PRO, the nation’s premier bodybuilding competition. Not only will men and women be competing for thousands of dollars in prizes and a trip to represent their nation at Mr. Olympia but sporting goods and nutritional supplements will also be available for sale. Learn more about the culture of the Indian subcontinent during Diwali, the annual festival of lights that will be celebrated in St. Petersburg this weekend at the Culture Palace on Tambovskaya Ul. For 100 rubles ($2.40), festival-goers listen to Indian music, try on traditional Indian outfits and sample dishes highlighting the culinary diversity of the billion-plus people in the South Asian superpower.



Sunday, Nov. 2


Check out the latest video and interactive games at the Gaming Festival at the Mayakovsky Library ending today. Meet with the developers of the popular and learn more about their work, or learn how to play one of their creations with the opportunity to ask the creators themselves about the exact rules.



Monday, Nov. 3


Non-athletes can get feed their need for competition without breaking a sweat at the Rock-Paper-Scissors tournament this evening at the Cube Bar at Lomonosova 1. Referees will judge the validity of each matchup award points to winners while the city’s elite fight for the chance to be called the best of the best. Those hoping to play must arrange a team beforehand and pay 200 rubles ($4.80) to enter.



Tuesday, Nov. 4


Attend the premiere of Canadian director Xavier Dolan’s latest film “Mommy” at the Avrora theater this evening. The fifth picture from the 25-year-old, it is the story of an unruly teenager but the most alluring (or unappealing) aspect is the way the film was shot: in a 1:1 format that is more reminiscent of Instagram videos than cinematic art. Tickets cost 400 rubles ($9.60) and snacks and drinks will be available.



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