Archive

Tag Archives: negative

Moody’s Investors Service has today downgraded the government of Russia’s sovereign debt rating to Ba1/Not Prime (NP) from Baa3/Prime-3 (P-3). The rating outlook is negative. This rating action concludes the review for downgrade that commenced on January 16, 2015.

Moody’s downgrade of Russia’s government bond rating to Ba1 is driven by the following factors:

  • The continuing crisis in Ukraine and the recent oil price and exchange rate shocks will further undermine Russia’s economic strength and medium-term growth prospects, despite the fiscal and monetary policy responses;
  • The government’s financial strength will diminish materially as a result of fiscal pressures and the continued erosion of Russia’s foreign exchange (FX) reserves in light of ongoing capital outflows and restricted access to international capital markets;
  • The risk is rising, although still very low, that the international response to the military conflict in Ukraine triggers a decision by the Russian authorities that directly or indirectly undermines timely payments on external debt service.

Read More

OVERVIEW

  • Liquidity constraints have narrowed the timeframe during which Greece’s new government can reach an agreement with its official creditors on a financing programme, in our view.
  • We believe the potential uncertainties surrounding the timing and success of such an agreement risk exacerbating deposit outflows, depressing investment, and weakening tax compliance.
  • As a result, we have lowered our long-term rating on Greece to ‘B–’ from ‘B’.
  • The long- and short-term ratings remain on CreditWatch negative.

Read More

OVERVIEW

  • In our view, the Russian Federation’s monetary policy flexibility has weakened, as have its economic growth prospects.
  • We are therefore lowering our foreign currency sovereign credit ratings on Russia to ‘BB+/B’ from ‘BBB-/A-3’ and our local currency sovereign credit ratings to ‘BBB-/A-3’ from ‘BBB/A-2’.
  • At the same time, we removed these ratings from CreditWatch, where they were placed with negative implications on Dec. 23, 2014.
  • The outlook is negative, reflecting our view that Russia’s monetary policy flexibility could diminish further. We could lower the ratings if external and fiscal buffers deteriorate over the next 12 months faster than we currently expect.

Read More

OVERVIEW

We are reviewing our assessment of Russia’s monetary flexibility and the impact of the weakening economy on its financial system. As a result, we are placing our long-term sovereign credit ratings on Russia on CreditWatch with negative implications. We expect to resolve the CreditWatch upon the conclusion of our review, which we expect by mid-January.

Read More

OVERVIEW

  • In our view, the French government’s budgetary position is deteriorating in light of France’s constrained nominal and real economic growth prospects.
  • We believe that, due to policy implementation risk related to the budgetary consolidation and structural reforms, a recovery of the French economy could prove elusive and that France’s public finances might deteriorate beyond 2014, although this is not our base-case scenario.
  • As a result, we are revising our outlook on France to negative from stable and affirming our ‘AA/A-1+’ long- and short-term sovereign credit ratings.
  • The ratings on France remain supported by our view of the French economy’s high income per capita and productivity, its diversification, and its stable financial sector.

Read More

London, 19 September 2014 — Moody’s Investors Service has today announced its decision to maintain the negative outlook on France’s government bond rating, which it has affirmed at Aa1.

The agency’s decision to affirm France’s Aa1 rating reflects Moody’s view that, despite negative credit pressures, the country retains significant credit strengths, including the size and wealth of the economy, as well as its affordable debt burden despite a continuous, gradual erosion of its economic and fiscal strength. The affirmation is also supported by renewed government commitment to accelerating the pace of structural reform, introducing a more consistent approach to economic policy, and proceeding with its budget saving plans.

That said, Moody’s decision to maintain a negative rating outlook reflects the rating agency’s view that the execution risks associated with implementing the government’s proposed structural reform initiatives are significant, given the strength of vested political interests that might oppose them and the poor track record in implementing such reforms.

In a related rating action, Moody’s has today announced its decision to maintain negative outlooks on the Aa1 ratings of Société de Financement de l’Economie Française (SFEF) and of Société de Prise de Participation de l’État (SPPE). The two entities’ Aa1 rating are affirmed, in line with the sovereign’s rating. Moody’s also affirmed the Prime-1 rating of SPPE, including its euro-denominated commercial paper programme. The senior debt instruments issued by the two entities are backed by unconditional and irrevocable guarantees from the French government.

Read More

OVERVIEW

  • We are affirming our ‘BBB/A-2’ long- and short-term sovereign credit ratings on the Republic of Italy.
  • The affirmation reflects our view of Italy’s wealthy and diversified economy, as well as our expectation that the government will make some progress on important structural and fiscal reforms.
  • The outlook on the long-term rating remains negative, reflecting our view of risks to the public sector balance sheet from weak real and nominal growth prospects.

RATING ACTION

On June 6, 2014, Standard & Poor’s Ratings Services affirmed its unsolicited ‘BBB’ long-term and ‘A-2’ short-term sovereign credit ratings on the Republic of Italy. The outlook on the long-term rating remains negative.

Read More