- On March 3, 2022, S&P Global Ratings lowered its foreign and local currency sovereign credit ratings on Russia to 'CCC-/C' from 'BB+/B' and 'BBB-/A-3', respectively. We also revised downward our transfer and convertibility assessment to 'CCC-' from 'BBB-'. The ratings remain on CreditWatch with negative implications, where we placed them on Feb. 25, 2022.
- The sovereign downgrade reflects the consequences of Russia's military conflict with Ukraine, which has prompted a new round of G7 government sanctions, including ones targeting the foreign exchange reserves of The Central Bank of Russia (CBR). This has rendered a large part of these reserves inaccessible, undermining the CBR's ability to act as a lender of last resort and impairing what had been--until recently--Russia's standout credit strength: its net external liquidity position.
- To mitigate the resulting high exchange rate and financial market volatility, and to preserve remaining foreign currency buffers, Russia's authorities have--among other steps--introduced capital-control measures that we understand could constrain nonresident government bondholders from receiving interest and principal payments on time.
- We also believe that virtually all rated corporates and utilities companies in Russia are directly affected by uncertainties around their technical ability to make timely debt payments to all creditors due to the measures imposed by the Russian authorities, irrespective of their financial capacity to pay.
- As a result, we downgraded 52 Russian corporates and utilities companies to 'CCC-', the same level as the foreign currency rating and the transfer and convertibility assessment on Russia, to reflect the heightened sovereign risk for all Russian corporate issuers. At the same time, we placed all our issuer credit and issue ratings on these companies on CreditWatch with negative implications.
NEW YORK (S&P Global Ratings) March 7, 2022--S&P Global Ratings said today that it downgraded 52 Russian corporates and utilities companies to 'CCC-', the same level as the foreign currency rating and the transfer and convertibility assessment on Russia, to reflect the heightened sovereign risk for all Russian corporate issuers. At the same time, we placed all our issuer credit and issue ratings on these companies on CreditWatch with negative implications (see ratings list).
The downgrade of these 52 Russian corporates and utilities companies follows the imposition of measures that we believe will likely substantially increase their risk of default. Among these are capital controls introduced by authorities that aim at shielding the ruble from the impact of severe economic sanctions while preserving remaining useable reserve buffers. The new G7 government restrictions were imposed on Russia in response to its military actions in Ukraine. We understand from public information and press reports that capital-control measures entail the ban on cross-border financial flows, including debt service payments of both the private sector and the government. We believe this will very likely restrict the ability of nonresident domestic and foreign currency bondholders to receive interest and/or principal payments on time.
Therefore, today's rating actions reflect our view of the uncertainties for virtually all rated Russian corporates and utilities companies, whether they are government-related entities or privately owned companies, around their technical ability to make timely debt payments (interest and/or principal) to all creditors and in full, due to measures imposed by the Russian government, irrespective of their financial capacity to pay.
Below is the list of all the affected companies and their subsidiaries.
CreditWatch
The CreditWatch negative placement on all the affected entities indicates that we could lower the ratings further over the next few weeks. We expect to resolve the CreditWatch placement once we have more clarity on the technical ability and/or willingness of the companies to honor their debt obligations to all creditors in full and on time.
Related Criteria
- General Criteria: Hybrid Capital: Methodology And Assumptions, March 2, 2022
- General Criteria: Environmental, Social, And Governance Principles In Credit Ratings, Oct. 10, 2021
- General Criteria: Group Rating Methodology, July 1, 2019
- Criteria | Corporates | General: Corporate Methodology: Ratios And Adjustments, April 1, 2019
- Criteria | Corporates | General: Reflecting Subordination Risk In Corporate Issue Ratings, March 28, 2018
- General Criteria: Methodology For Linking Long-Term And Short-Term Ratings, April 7, 2017
- Criteria | Corporates | Industrials: Methodology: Investment Holding Companies, Dec. 1, 2015
- General Criteria: Rating Government-Related Entities: Methodology And Assumptions, March 25, 2015
- Criteria | Corporates | General: Methodology And Assumptions: Liquidity Descriptors For Global Corporate Issuers, Dec. 16, 2014
- Criteria | Corporates | Industrials: Key Credit Factors For The Telecommunications And Cable Industry, June 22, 2014
- Criteria | Corporates | Industrials: Key Credit Factors For The Unregulated Power And Gas Industry, March 28, 2014
- General Criteria: Methodology: Industry Risk, Nov. 19, 2013
- Criteria | Corporates | General: Corporate Methodology, Nov. 19, 2013
- Criteria | Corporates | Utilities: Key Credit Factors For The Regulated Utilities Industry, Nov. 19, 2013
- General Criteria: Country Risk Assessment Methodology And Assumptions, Nov. 19, 2013
- General Criteria: Ratings Above The Sovereign--Corporate And Government Ratings: Methodology And Assumptions, Nov. 19, 2013
- General Criteria: Methodology: Management And Governance Credit Factors For Corporate Entities, Nov. 13, 2012
- General Criteria: Criteria For Assigning 'CCC+', 'CCC', 'CCC-', And 'CC' Ratings, Oct. 1, 2012
- General Criteria: Principles Of Credit Ratings, Feb. 16, 2011
- General Criteria: Stand-Alone Credit Profiles: One Component Of A Rating, Oct. 1, 2010
Ratings List
Downgraded; CreditWatch/Outlook Action | ||||||
---|---|---|---|---|---|---|
To | From | |||||
LUKOIL PJSC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | BBB/Stable/-- | ||||
ALROSA PJSC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/C | BBB-/Stable/A-3 | ||||
Gazprom PJSC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/C | BBB-/Stable/A-3 | ||||
Gazprom Capital OOO |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | BBB-/Stable/-- | ||||
Gazprom Neft PJSC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | BBB-/Stable/-- | ||||
Rosneft Oil Co. PJSC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | BBB-/Stable/-- | ||||
Rosneft International Holdings Ltd. |
||||||
Issuer Credit Rating | CCC-/Watch Neg/C | BBB-/Stable/A-3 | ||||
Magnitogorsk Iron and Steel Works PJSC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/C | BBB-/Stable/A-3 | ||||
Transneft PJSC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | BBB-/Stable/-- | ||||
Severstal PAO |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | BBB-/Stable/-- | ||||
MMC Norilsk Nickel PJSC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | BBB-/Stable/-- | ||||
TMK PAO |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | B+/Negative/-- | ||||
NLMK PJSC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | BBB-/Stable/-- | ||||
NOVATEK PJSC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | BBB/Stable/-- | ||||
Eurasia Drilling Co. Ltd. |
||||||
Issuer Credit Rating | CCC-/Watch Neg/C | BB+/Stable/B | ||||
Holding Co. Metalloinvest JSC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | BBB-/Stable/-- | ||||
EvrazHolding Finance LLC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/C | BB+/Stable/B | ||||
PhosAgro PJSC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | BBB-/Stable/-- | ||||
Petropavlovsk PLC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | B-/Stable/-- | ||||
Sibur Holding PJSC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | BBB-/Stable/-- | ||||
EuroChem Group AG |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | BB/Stable/-- | ||||
Polyus PJSC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | BB+/Stable/-- | ||||
Evraz PLC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | BB+/Stable/-- | ||||
Corporation VSMPO-AVISMA PSC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | BB+/Stable/-- | ||||
Rostelecom PJSC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | BB+/Stable/-- | ||||
Mosenergo PJSC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | BBB-/Stable/-- | ||||
Mobile TeleSystems PJSC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | BBB-/Stable/-- | ||||
Sistema (PJSFC) |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | BB/Positive/-- | ||||
Federal Grid Co. of the Unified Energy System |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | BBB-/Stable/-- | ||||
Russian Railways JSC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | BBB-/Stable/-- | ||||
MegaFon PJSC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | BB+/Stable/-- | ||||
Sovcomflot PAO |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | BBB-/Stable/-- | ||||
X5 Retail Group N.V. |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | BB+/Stable/-- | ||||
X5 Finance OOO |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | BB+/Stable/-- | ||||
Vodokanal St. Petersburg |
||||||
Issuer Credit Rating | CCC-/Watch Neg/C | BB+/Stable/B | ||||
Etalon LenSpetsSMU JSC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/C | B-/Positive/B | ||||
RusHydro PJSC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/C | BBB-/Stable/A-3 | ||||
Rosseti Moscow Region PJSC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | BB+/Stable/-- | ||||
Rosseti Centre, PJSC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/C | BB+/Stable/B | ||||
Mosvodokanal JSC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/C | BBB-/Stable/A-3 | ||||
Atomic Energy Power Corp. JSC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/C | BBB-/Stable/A-3 | ||||
ER-Telecom |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | B+/Stable/-- | ||||
Magnit PJSC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | BB+/Stable/-- | ||||
Katren JSC SPC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/C | BB+/Stable/B | ||||
Rosseti PJSC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/C | BBB-/Stable/A-3 | ||||
DeloPorts LLC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | B+/Stable/-- | ||||
TransFin-M PC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/C | B/Negative/B | ||||
SCF Capital DAC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | BBB-/Stable/-- | ||||
TGC-1 PJSC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/C | BBB-/Stable/A-3 | ||||
Setl Group LLC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/C | B+/Positive/B | ||||
Leader Invest JSC |
||||||
Issuer Credit Rating | CCC-/Watch Neg/C | B-/Positive/B | ||||
Yandex N.V.. |
||||||
Issuer Credit Rating | CCC-/Watch Neg/-- | BBB-/Stable/-- | ||||
All ratings are foreign currency ratings. |
Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors, have specific meanings ascribed to them in our criteria, and should therefore be read in conjunction with such criteria. Please see Ratings Criteria at www.standardandpoors.com for further information. A description of each of S&P Global Ratings' rating categories is contained in "S&P Global Ratings Definitions" at https://www.standardandpoors.com/en_US/web/guest/article/-/view/sourceId/504352 Complete ratings information is available to subscribers of RatingsDirect at www.capitaliq.com. All ratings affected by this rating action can be found on S&P Global Ratings' public website at www.standardandpoors.com. Use the Ratings search box located in the left column. Alternatively, call one of the following S&P Global Ratings numbers: Client Support Europe (44) 20-7176-7176; London Press Office (44) 20-7176-3605; Paris (33) 1-4420-6708; Frankfurt (49) 69-33-999-225; or Stockholm (46) 8-440-5914
Analytical Group Contact: | Corporate and IFR EMEA; RatingsCorpIFREMEA@spglobal.com |
No content (including ratings, credit-related analyses and data, valuations, model, software, or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced, or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor’s Financial Services LLC or its affiliates (collectively, S&P). The Content shall not be used for any unlawful or unauthorized purposes. S&P and any third-party providers, as well as their directors, officers, shareholders, employees, or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness, or availability of the Content. S&P Parties are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, for the results obtained from the use of the Content, or for the security or maintenance of any data input by the user. The Content is provided on an “as is” basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT’S FUNCTIONING WILL BE UNINTERRUPTED, OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Content even if advised of the possibility of such damages.
Credit-related and other analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact. S&P’s opinions, analyses, and rating acknowledgment decisions (described below) are not recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security. S&P assumes no obligation to update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment, and experience of the user, its management, employees, advisors, and/or clients when making investment and other business decisions. S&P does not act as a fiduciary or an investment advisor except where registered as such. While S&P has obtained information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives. Rating-related publications may be published for a variety of reasons that are not necessarily dependent on action by rating committees, including, but not limited to, the publication of a periodic update on a credit rating and related analyses.
To the extent that regulatory authorities allow a rating agency to acknowledge in one jurisdiction a rating issued in another jurisdiction for certain regulatory purposes, S&P reserves the right to assign, withdraw, or suspend such acknowledgement at any time and in its sole discretion. S&P Parties disclaim any duty whatsoever arising out of the assignment, withdrawal, or suspension of an acknowledgment as well as any liability for any damage alleged to have been suffered on account thereof.
S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain nonpublic information received in connection with each analytical process.
S&P may receive compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on its Web sites, www.spglobal.com/ratings (free of charge), and www.ratingsdirect.com (subscription), and may be distributed through other means, including via S&P publications and third-party redistributors. Additional information about our ratings fees is available at www.spglobal.com/usratingsfees.