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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, Sept. 17


AmCham’s Investment and Legal Committee Meeting convenes this morning in their office in the New St. Isaac Office Center at 9 a.m.


Learn more about the science of teaching English at today’s EFL Seminar hosted by the British Book Center. Revolving around the topic of learning styles, the workshop will help attendees better understand the different effective learning methods that can be implemented to learn English more effectively.



Thursday, Sept. 18


Get your nerd on at Boomfest, St. Petersburg’s answer to the United States’ popular ComicCon. Starting today, this international festival of comics will take over venues throughout the city center and includes exhibitions of comics and illustrations, film screenings, competitions and the chance to meet the genre’s authors, artists and experts.



Friday, Sept. 19


SPIBA’s newest addition to their Cultural Discoveries events is “Handmade in Germany,” an exhibition featuring unique handmade objects of a significantly higher quality than mass-produced items. The work of over 100 German manufacturers will be displayed during the event, which opens today in the Lutheran Church of Saint Peter and Paul on Nevsky Prospekt and runs through Sept. 28.



Saturday, Sept. 20


Starting on Sept. 18 and ending tomorrow is the Extreme Fantasy Wakeboarding Festival in Sunpark by Sredny Suzdalskoye lake in the Ozerki region of the city.


Those after something more laid back can instead head to Jazz and Wine night at TerraVino with legendary jazz guitarist Ildar Kazahanov. 12/14 Admiralteyskaya Emb.



Sunday, Sept. 21


Learn more about African culture and get some exercise during today’s “Djembe and Vuvuzela,” a bike ride starting in Palace Square that includes several stops where riders can listen to the music of Africa or watch short films about the continent. The riders plan to set off at 4 p.m. and all you need to join is a set of wheels.



Monday, Sept. 22


Do you love puppetry? If so, then be sure to go to BTK-Fest, a five-day festival that starts on Sept. 19 celebrating the art. Contemporaries from France, Belgium, the U.K. and other countries will join Russian artists to put on theatrical performances involving a variety of themes, materials and eras. Workshops and meetings are also scheduled for a chance to discuss the artistic medium in further depth.



Tuesday, Sept. 23


Marina Suhih, Director of the External Communications Department at Rostelecom North-West, and Yana Donskaya, HR Director for Northern Capital Gateway are just some of the confirmed participants of today’s round table discussion on “Interaction with Trade Unions” being hosted by SPIBA. Confirm your attendance with SPIBA by Sept. 22.


Kino Expo 2014, an international film industry convention, will be at LenExpo from today until Sept. 26. The third largest exhibition of film equipment in the world, the expo focuses on not only Russia but former Soviet republics as well.



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