Posts Tagged: credit rating

 

Moody’s Investors Service has downgraded Central Bank of India (CBI) and Indian Overseas Bank’s (IOB) local and foreign currency deposit ratings to Ba1 from Baa3. At the same time, IOB’s senior unsecured debt, issued from its Hong Kong branch was also downgraded to Ba1 from Baa3. 

The rating action reflects Moody’s assumption of a lower level of support from the Government of India (Baa3, Stable) following the government’s recent announcements that indicate that it wishes to differentiate between state-owned banks (SOE banks) when distributing capital. 

Moody’s continues to assume a very high probability that the government would support these two SOE banks. However, the change of government policy means that the standalone credit quality of public sector banks has become a more important consideration for the senior unsecured and deposit ratings of the banks compared to previously when Moody’s rated all SOE banks at the same level as the Government of India. 

At the same time, Moody’s has maintained its negative outlook on CBI’s local and foreign currency deposit ratings. 

Moody’s has also maintained its stable outlook for IOB’s senior unsecured debt and local and foreign currency deposit ratings.  >> Read More

Greece’s credit rating cut by S&P

07 February 2015 - 9:10 am
 

A testing week for Greece and its newly elected government has ended on a sour note.

The indebted country has had its credit rating cut to B- from B by rating agency Standard & Poor’s, while the outlook on the rating remains on negative.

S&P’s move comes at a particularly fraught time for Greece’s new government as it seeks to renegotiate the terms of a 2010 bailout the country took from fellow eurozone countries and the International Monetary Fund.

S&P said it had taken a notch off Greece’s rating because: >> Read More

 

Standard & Poor’s ratings agency said Wednesday it had taken various rating actions on major Russian corporations following the recent downgrade of Russia’s sovereign rating from BBB- to BB+ or ‘junk’ status.

 “We have reviewed our ratings on Russian corporations in the commodity exports, telecommunications, and infrastructure and utility sectors. We are consequently lowering our ratings on 14 companies and subsidiaries, affirming the ratings on 10 companies and subsidiaries, and revising several outlooks to negative” S&P said in a statement.

In particular, the agency downgraded the foreign currency ratings of Russia’s energy giant Gazprom, telecom operator MegaFon, railroads utility Russian Railways from BBB- to BB+.

 Other corporations affected by various downgrades include Rosneft, Gazprom Neft, Transneft, Novatek and MTS. >> Read More

 

According to a company statement, the solid credit of Russian companies, in spite of falling oil prices, is largely due to relatively low income volatility compared to foreign competitors.

 Russian companies’ endurance of the crisis could be explained by a retained progressive tax regime in prospecting and extracting oil and gas, the relative flexibility of the ruble exchange rate and the regulation of gas prices inside the country, Fitch said.

Fitch argued that the tightening of US and EU economic sanctions, imposed over Moscow’s alleged role in the Ukrainian crisis, is a much more important factor for influencing Russian company ratings. The sanctions have made it illegal for US and EU firms to provide key Russian oil companies with technology for deepwater, Arctic and shale oil drilling, and also complicated access to Western financial support. >> Read More

 

The Chinese Dagong Global credit rating agency has decided to maintain the A/A local and foreign currency sovereign credit ratings of the Russian Federation with a stable outlook.

“Although the Russian economy has been mired in deteriorating external circumstances, a certain scale of fiscal and foreign exchange reserves provides necessary buffers, keeping the deviation degree between available debt repayment sources and the wealth creation capability of the Russian government relatively small, and subsequently securing a basically stable debt repayment capability,” Dagong said in a press release Monday.

Meanwhile the world’s three largest rating agencies, Standard & Poor’s (S&P), Fitch, and Moody’s, have recently downgraded Russia’s credit ratings.

 S&P downgraded Russia’s sovereign rating from BBB- to a “junk” BB+, a status indicating a probable default, on January 26.

On January 9, Fitch downgraded Russia’s sovereign debt rating to a BBB- amid falling oil prices and ruble depreciation, while Moody’s downgraded Russia’s credit rating back in October, 2014.

Kremlin spokesman Dmitry Peskov has said that the downgrades are politically motivated and do not reflect the real economic situation in Russia.

 

The US Justice Department has started a preliminary investigation into the activities of the Moody’s credit rating agency, suspecting it of fraud related to mortgage deals, the Wall Street Journal reports.

Justice Department officials have met with multiple former executives of Moody’s Investors Service in recent months to find out whether the company compromised standards to win business in the build-up to the 2008 financial crisis, The Wall Street journal reported Sunday, citing “people familiar with the situation”.

 According to the same sources, the Justice Department investigation is its earliest stages and it is not yet clear whether it will end in a lawsuit. A Moody’s spokesman asked to comment on the issue by the Wall Street Journal declined to answer. >> Read More

 

The Standard & Poor’s rating agency has put Greece on credit watch, citing the policies of the country’s new government as the possible trigger of a future credit rating downgrade.

 “The CreditWatch placement reflects our view that some of the economic and budgetary policies advocated by the newly elected Greek government, led by the left-wing Syriza party, are incompatible with the policy framework agreed between the previous government and official creditors,” S&P said in a press release Wednesday.

S&P warned that “if the new Greek government fails to agree with official creditors on further financial support, this would further weaken Greece’s creditworthiness” and would prompt the agency to lower the country’s B/B sovereign debt ratings.

In 2009, S&P came under fire for downgrading Greece’s credit rating, in a move that contributed to the country’s economic meltdown. Greece was the first Eurozone country to have its debt rating slashed to junk, despite protests from Brussels. >> Read More

 

Russian President Vladimir Putin’s spokesman said on Tuesday that decisions taken by credit rating agencies were politically motivated, after U.S. agency S&P downgraded Russia’s sovereign credit rating to below investment grade.

“They [ratings decisions] are politically motivated, and consequently it’s unlikely that wise companies can and should take them into account,” spokesman Dmitry Peskov said.

However, First Deputy Central Bank Governor Ksenia Yudayeva said the S&P decision was largely expected, the RIA Novosti news agency reported.

“We believe that, to a large extent, this was expected,” Yudayeva said. “In general, it was already taken into account in many decisions.”

 

On the heels of last week’s downgrades by Fitch and Moody’s to just above junk status, The Central Bank of Russia (CBR) has issued a statement that it will no longer use credit ratings from Standard & Poor’s, Fitch, or Moody’s that were assigned after March 1, 2014. All credit ratings will now be at the discretion of the Board of Directors of the Bank as regulators assess whether or not the ratings made after March are accurate. Sounds like Spain, Greece, and USA’s previous derision over ratings agencies proclamations is heading east.

As RT reports,

The Central Bank of Russia will no longer use credit ratings from Standard & Poor’s, Fitch, or Moody’s that were assigned after March 1, 2014.

 

All credit ratings given to Russian companies and banks will now be at the discretion of the Board of Directors of the Bank, according to a press statement Monday. The regulator will assess whether or not the ratings made after March are accurate.

 

The decision comes after Fitch and Moody’s downgraded Russian sovereign debt to just above junk status. Standard & Poor’s will decide whether it cuts Russian debt to junk level by the end of January after cutting it last April, after Crimea rejoined Russia and the West began to levy sanctions against Moscow.

>> Read More

 

Ratings agency Standard and Poor’s said on Friday that it planned to complete a review of Russia’s sovereign credit rating by the end of January, after earlier saying it expected to make a decision by mid-January.

S&P currently rates Russia’s sovereign debt one notch above ‘junk’ status, and Russian markets have been jittery over the prospect of a downgrade.

A downgrade would mark the first time in more than 10 years that Russian sovereign debt has been rated below investment grade.

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