Moody’s puts Russia, Ukraine debt ratings on road to downgrades


Moody’s Investors Service said late Friday it has placed Russia’s and Ukraine’s credit ratings on review for possible downgrades, which in the case of Russia’s debt would mean a slide toward speculative, or junk, ratings. The action was triggered by Russia’s invasion, the bond ratings agency said. Russia currently holds a Baa3 rating, Moody’s lowest rung of investment grade, while Ukraine holds B3 ratings, the middle rung of non-investment grade. The Russian invasion of Ukraine represents “a significant further elevation of the geopolitical risks … which is being accompanied by additional and more severe sanctions on Russia, potentially including those that could impact sovereign debt repayment,” Moody’s said. It added that a fuller picture of the impact of sanctions would depend on the sanctions’ scope, the sectors targeted, and the degree of coordination between Western countries. For Ukraine, an “extensive conflict” would pose a liquidity risk as the country has “sizeable” debts maturing in the coming years and its economy relies on foreign-currency funding, Moody’s said.

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