Moody’s on Sunday downgraded Russia’s credit rating from ca to ca, citing central bank capital controls that are likely to restrict payments on the country’s external debt and lead to default.
The ratings agency said its decision to downgrade Russia was “driven by serious concerns about Russia’s willingness and ability to pay its debt obligations”.
The Russian economy has plunged into crisis following harsh sanctions imposed by the West, including freezing central bank assets held abroad and withdrawing several Russian banks from SWIFT international payment systems.
Last week, the central bank temporarily halted payments, and on Wednesday it claimed to ban coupon payments for foreign investors holding ruble-denominated sovereign debt.
Moody’s said default risk has increased and foreign bondholders are likely to recover only a portion of their investments.
“Potential recovery for investors will be in line with historical averages, in line with CA ratings,” the agency said, adding, “At the level of CA ratings, recovery forecasts range between 35 and 65% (of face value). , ,
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