In recent days, Moody’s had also cut its rating on Russia to Approx and has kept a outlook negative
There war between Russia and Ukraine brings the world economy to its knees more and more. In particular for flythe scenario becomes more and more tense and uncertain: theinternational agency Fitch downgraded the rating of the Russian Federation from `B ‘to` C’ due to the sanctioning effects of the invasion of Ukraine, noting in a note the risk of “imminent default” of debt.
In recent days Moody’s had also cut its rating on Russia to ‘Ca’ and maintained a negative outlook, citing central bank capital controls that would limit cross-border payments on debt as well. A move that comes only a few days after the decision to relegate the Russian debt to “junk”.
Now the new downgrading“driven by grave concerns about Russia’s willingness and ability to pay its debt obligations,” said therating agency, adding that the risks of default have increased. “The probable recovery for investors will be in line with the historical average, commensurate with a rating Approx. At the Ca rating level, recovery expectations are 35 to 65%, “he added Moody’s.
But not only Fitch. As reported agency Nov.a, also according to the US investment bank Morgan Stanley Russia is increasingly struggling to honor its foreign debt as a result of the collapse in the prices of sovereign bonds, and the Country is on the verge of a recession which could lead to default by mid-April.
According to the bank “the default is the most likely scenario “. In a note published on 7 March, the bank argues that a possible default by Russia “would hardly be an ordinary default, and the most fitting comparison would perhaps be that of Venezuela”. Morgan Stanley hypothesizes that this scenario could materialize as early as April 15, at the expiry of the “grace period” of 30 days available to the Russian government for the payment of the installments on the dollar-denominated debt due in 2023 and 2043. According to “Bloomberg” , the bond value to 2023 slipped to 29 cents on the dollarthe lowest ever.
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