“Probable non-payment”
Rating agency downgrades 28 Russian companies
03/12/2022, 18:21
From B to “mainly CC”: Gazprom and 27 other Russian commodity giants are further downgraded by the rating agency Fitch. This means that the companies “probably” will not meet their financial obligations. According to Fitch, the danger of a Russian national bankruptcy is also “imminent”.
The rating agency Fitch has downgraded the creditworthiness of 28 Russian commodity groups and considers a “payment default of any kind to be likely”. Fitch downgraded gas giant Gazprom, oil major Lukoil, mining companies Rusal, Polyus, Evraz and 23 other companies from B to “mainly CC”, meaning it is “likely” that these companies will default on their financial obligations.
The rating agency Moody’s had previously downgraded Gazprom and Lukoil accordingly. The Russian government’s permission to repay debts to so-called enemy countries in rubles jeopardizes the ability of these companies to pay their creditors on time.
Moscow’s list, drawn up in response to increased Western sanctions over the Ukraine invasion, includes European Union countries, Australia, the United Kingdom, Canada, Monaco, South Korea, the United States, Switzerland and Japan.
In early March, three major rating agencies classified Russia’s long-term debt in the category of countries that may no longer be able to repay their debts due to increasing sanctions against the country. Fitch later lowered the credit rating further, meaning that the threat of sovereign default was “imminent” in their eyes.