Moody’s slams Russian corporates

Moody's Investors Service said it downgraded the ratings of Russian non-financial corporates, following the sovereign rating action on the government of Russia which took place on March 6. The agency downgraded the Russia's long-term issuer rating and senior unsecured ratings to Ca from B3.

“The downgrade of Russia's ratings was triggered by Moody's expectation that capital controls by the Central Bank of Russia (CBR) will restrict cross border payments including for debt service on government bonds. Moody's view is supported by a reported statement from the National Settlement Depository (NSD) that coupon payments on OFZ government bonds due on Wednesday March 2 have only been paid to local holders of the papers, citing the CBR order prohibiting payments to non-residents.

“The downgrade to Ca was hence driven by severe concerns around Russia's willingness and ability to pay its debt obligations. Moody's view is that the risk of a default occurring has significantly increased and that the likely recovery for investors will be in line with the historical average, commensurate with a Ca rating,” Moody’s said in a press release.

The agency cut PJSC Alrosa to Caa2 from Baa2, Alrosa Finance SA’s foreign-currency senior unsecured rating to Caa2 from Baa2, Avtoban-Finance JSC’s domestic-currency rating to Caa1 from B1, Borets Finance DAC’s foreign-currency backed senior unsecured rating to Caa2 from Ba3 and DME Airport DAC’s foreign-currency backed senior unsecured rating to Caa2 from Ba1.

Moody’s lowered Evraz plc’s foreign-currency senior unsecured rating to Caa2 from Ba1, EuroChem Finance DAC’s foreign-currency backed senior unsecured rating to Caa2 from Ba2, GPN Capital SA’s foreign-currency backed senior unsecured rating to Caa2 from Baa2, Gaz Capital SA’s foreign- and domestic-currency senior unsecured and backed senior unsecured ratings to Caa2 from Baa2, Gaz Finance plc’s foreign-currency senior unsecured ratings to Caa2 from Baa2 and foreign-currency junior subordinated ratings to Caa3 from Ba1 and Global Ports (Finance) plc’s foreign-currency senior unsecured rating to Caa2 from Ba1.

Additionally, the agency cut Metalloinvest Finance DAC’s foreign-currency backed senior unsecured rating to Caa2 from Baa3, Lukoil Capital DAC’s foreign-currency backed senior unsecured rating to Caa2 from Baa2, Lukoil International Finance BV’s foreign-currency backed senior unsecured rating to Caa2 from Baa2, Lukoil PJSC to Caa2 from Baa2, MMC Finance DAC’s foreign-currency senior unsecured rating to Caa2 from Baa2, MMC Norilsk Nickel, PJSC to Caa2 from Baa2, MMK International Capital DAC’s foreign-currency backed senior unsecured rating to Caa2 from Baa2, Magnitogorsk Iron & Steel Works to Caa2 from Baa2, NLMK to Caa2 from Baa2 and Steel Funding DAC’s foreign- and domestic-currency senior unsecured ratings to Caa2 from Baa3.

Moody’s also dropped ratings for Celtic Resources Holdings DAC’s foreign-currency backed senior unsecured ratings to Caa2 from Ba1, Nord Gold plc to Caa2 from Ba1, Novatek Finance Ltd.’s foreign-currency senior unsecured rating to Caa2 from Baa2, PAO Novatek to Caa2 from Baa2, PAO Severstal’s ratings to Caa2 from Baa2, Steel Capital SA’s foreign-currency senior unsecured ratings to Caa2 from Baa2, Chelpipe Finance DAC’s foreign-currency backed senior unsecured rating to Caa2 from B1, TMK Capital SA’s foreign-currency senior unsecured rating to Caa2 from B1, IMH Capital DAC’s foreign-currency backed senior unsecured rating Caa2 from B1, Koks to Caa2 from B1, Bashneft to Caa2 from Baa2, Rosneft to Caa2 from Baa2, Rosneft International Finance Ltd.’s foreign-currency backed senior unsecured rating to (P) Caa2 from (P) Baa3, PIK-Corp. to Caa3 from Ba3, PIK Securities DAC’s foreign-currency backed senior unsecured rating to Caa3 from Ba3, PJSC PIK-specialized homebuilder to Caa2 from Ba2, PJSC PhosAgro to Caa2 from Baa3 and PhosAgro Bond Funding DAC’s foreign-currency backed senior unsecured rating to Caa2 from Baa3.

Additionally, the agency downgraded Polyus to Caa2 from Baa3, Polyus Finance plc’s foreign-currency backed senior unsecured rating to Caa2 from Baa3, Federal Grid Finance DAC’s foreign-currency senior unsecured MTN to (P) Caa2 from (P) Baa3, RusHydro Capital Markets DAC’s foreign-currency senior unsecured rating to Caa2 from Baa3, RusHydro to Caa2 from Baa3, Federal Passenger Co. JSC to Caa2 from Baa2, RZD Capital plc’s foreign- and domestic-currency senior unsecured ratings to Caa2 from Baa2, Russian Railways JSC to Caa2 from Baa2, SUEK Finance’s domestic-currency senior unsecured to Caa2 from Ba2, SUEK JSC to Caa2 from Ba2, SUEK Securities DAC’s backed senior unsecured rating to Caa2 from Ba2, Sibur Securities DAC’s foreign-currency backed senior unsecured rating to Caa2 from Baa3,

Finally, Moody’s lowered MTS International Funding Ltd.’s foreign-currency backed senior unsecured rating to Caa2 from Baa3, Mobile TeleSystems PJSC to Caa2 from Baa3, SCF Capital DAC’s foreign-currency backed senior unsecured rating to Caa2 from Baa3, PAO Sovcomflot to Caa2 from Baa3, Rusal Capital DAC’s foreign-currency backed senior unsecured to Caa2 from B1, Uralkali Finance DAC’s foreign-currency senior unsecured to Caa2 from Ba2, Uralkali PJSC to Caa2 from Ba2, VEON Holdings BV’s foreign-currency backed and senior unsecured rating to Caa2 from Ba2, VEON Ltd. to Caa2 from Ba2, VimpelCom PJSC to Caa2 from Ba2 and X5 Retail Group NV to Caa2 from Ba1.

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