Moody’s affirms Vnesheconombank’s issuer ratings

Moody’s Investors Service said it affirmed Vnesheconombank’s Ba1 local and foreign currency long-term issuer ratings and its Not Prime local and foreign currency short-term issuer ratings. All long-term ratings have a negative outlook.

At the same time, the agency downgraded to b3 from b1 the VEB baseline credit assessment as a result of VEB’s deteriorating stand-alone credit metrics amidst the volatile operating environment in Russia.

Moody’s said the issuer rating affirmation reflects Moody's expectations that VEB will retain its position of one of the Russian government's core assets, and that therefore the probability of support is very high, resulting in the issuer ratings of Ba1, in line with the Russian government.

At the same time, Moody’s said the baseline credit assessment downgrade primarily reflects the fact that, over past two years, VEB’s credit profile has materially deteriorated, largely reflecting the impairment of its government-directed project finance loans, particularly related to the 2014 Winter Olympics and Ukrainian enterprises.

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