Moody's takes action on Russian oblasts

Moody's Investors Service said it downgraded the foreign- and local-currency issuer ratings of the Omsk Oblast to Ba3 from Ba2 and kept the outlook at stable.

The agency also changed the outlook to negative from stable for the ratings assigned to Saratov Oblast (Ba2), Nizhniy Novgorod Oblast (Ba2), Belgorod Oblast (Ba1), Vologda Oblast (Ba1) and Tatarstan Republic (Ba1).

At the same time, Moody's Interfax Rating Agency downgraded Omsk's national scale rating to Aa3.ru from Aa2.ru and affirmed the long-term national scale ratings of Belgorod (Aa1.ru), Nizhniy Novgorod (Aa2.ru), Saratov (Aa2.ru) and Vologda (Aa1.ru).

The agency said these actions were prompted by the budgetary pressures stemming from the recessionary economic environment and increased refinancing risks under still- tight market conditions.

In most cases, Russian regional and local administrations have faced a material decline in tax revenue, particularly in corporate income tax, leading to significant budgetary stress and liquidity tensions, Moody's said. Although the regional governments have been able to cope with the tax revenue shortfalls in the first quarter, the agency believes that revenue weakness will likely continue and could intensify in the months ahead.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.