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- S&P cuts Russia's ratings to 'CC' on debt default risk
S&P cuts Russia's ratings to 'CC' on debt default risk
Global rating agency S&P cut Russia rating to ‘CC’ from CCC- while citing difficulties meeting debt payments due on its dollar-denominated 2023 and 2043 Eurobonds on Thursday, per Reuters.
“Russia's payment difficulties stem from international sanctions that reduced its available foreign exchange reserves and restricted its access to the global financial system, markets and infrastructure,” adds S&P per the news.
Key quotes
Although public statements by the Russian Ministry of Finance suggest to us that the government currently still attempts to transfer the payment to the bondholders, we think that debt service payments on Russia's Eurobonds due in the next few weeks may face similar technical difficulties
Russian bonds are hovering at deeply distressed levels in very illiquid trading, with most issues trading less than a handful of times a day, according to Refinitiv data.
FX implications
Although the news adds to the market sentiment, chatters that some on the floor did get coupon payment in dollar eased the risk-off mood. Even so, the Antipodeans witnessed a pullback during early Friday morning in Asia.
Read: Forex Today: Dollar fights back amid talks about chemical weapons
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