Fitch rates Russia eurobond BBB

Fitch Ratings said it assigned a BBB rating on the Russian Federation's $5.5 billion eurobond, split between a $2 billion five-year tranche and a $3.5 billion 10-year tranche. The rating is in line with Russia's long-term foreign-currency issuer default rating.

The outlook is stable.

The eurobond issue is a significant event for the emerging market bond market as it marks the Russian sovereign's return to international capital markets for the first time since its default in 1998, excluding debt exchanges, Fitch said.

The issue will be used for general governmental purposes, in effect financing part of the 2010 budget deficit, the agency said.

The government could finance the entire budget deficit for 2010 and 2011 from these sources, the agency said, and so does not need to issue eurobonds this year.

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