Moody's changes Structured Finance collateral outlook for Russia to negative

Moody's Investors Service downgraded its Structured Finance collateral outlook for Russia to negative from stable.

Moody's Investors Service downgraded its Structured Finance collateral outlook for Russia to negative from stable.

Anticipated weak GDP growth of -5.5% in 2015, rising unemployment and falling real wage levels will lead to an increase in arrears and defaults of SF collateral, Moody's said.

In January, the agency cut the long-term ratings of Russia’s state-owned lenders Sberbank, Vnesheconombank (VEB) and the Agency for Housing Mortgage Lending by one notch to Baa3 from Baa2. The rating cut to Baa3, the lowest investment-grade level under Moody’s classification, followed Russia’s sovereign rating downgrade.

Moody's also downgraded ratings of Transneft, Russia’s biggest oil pipeline operator, to Baa3. Gazprom's foreign-currency ratings were also downgraded to Baa3 while its local-currency ratingswere downgraded to Baa2.

The ratings of seventeen Russian regions and cities were also downgraded. The regions that received the downgrade are Khanty-Mansiysk, Samara, Chuvashia, Krasnoyarsk, Komi, Omsk, Nizhniy Novgorod, Krasnodar, Belgorod, Mordovia and Vologda. Three cities - Krasnodar, Omsk and Volgograd. Moody's has also put Moscow Region and Mordovia for a downgrade review, due to possible worsening of their credit abilities under a rising risk.

First published by TASS.

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