(Bloomberg) -- A currency crisis, recession and plunge in the price of its key export don’t mean Russia is any less creditworthy than the U.S., according to one of China’s biggest debt-rating companies.
Just the opposite -- it’s a better credit risk, says Dagong Global Credit Rating Co. The firm, which downgraded U.S. government debt in October 2013 to A-, today said it has decided to maintain Russia’s rating at A with a stable outlook.
“The debt repayment environment has somewhat deteriorated but is expected to stabilize in the medium term,” Dagong said in an emailed statement regarding its assessment. “As the economy stabilizes and the monetary policy normalizes, the domestic credit environment will gradually recover.”
Russia’s economy is forecast to contract 1.8 percent this year versus 3 percent growth in the U.S., which would be the fastest pace in 10 years, according to economists’ projections. Dagong’s optimism contrasts with the biggest ratings companies: Standard & Poor’s said last month it will probably lower Russia to non-investment grade within 90 days, while Fitch Ratings will announce the results of a review tomorrow.
Privately-held Dagong, established in 1994, isn’t formally tied to the Chinese government. It started sovereign ratings in 2010 in a bid to break the monopoly of U.S. rating firms, according to the company’s website, mirroring the government’s strategy of gaining greater influence on the global stage.
Complete story at - Russian Debt Safer Than U.S.? So Says China Rating House Dagong - Bloomberg Business
Just the opposite -- it’s a better credit risk, says Dagong Global Credit Rating Co. The firm, which downgraded U.S. government debt in October 2013 to A-, today said it has decided to maintain Russia’s rating at A with a stable outlook.
“The debt repayment environment has somewhat deteriorated but is expected to stabilize in the medium term,” Dagong said in an emailed statement regarding its assessment. “As the economy stabilizes and the monetary policy normalizes, the domestic credit environment will gradually recover.”
Russia’s economy is forecast to contract 1.8 percent this year versus 3 percent growth in the U.S., which would be the fastest pace in 10 years, according to economists’ projections. Dagong’s optimism contrasts with the biggest ratings companies: Standard & Poor’s said last month it will probably lower Russia to non-investment grade within 90 days, while Fitch Ratings will announce the results of a review tomorrow.
Privately-held Dagong, established in 1994, isn’t formally tied to the Chinese government. It started sovereign ratings in 2010 in a bid to break the monopoly of U.S. rating firms, according to the company’s website, mirroring the government’s strategy of gaining greater influence on the global stage.
Complete story at - Russian Debt Safer Than U.S.? So Says China Rating House Dagong - Bloomberg Business
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