Moody’s affirms Russia’s VEB rating at Ba1, outlook negative

MOSCOW, Dec 29 (PRIME) -- International rating agency Moody’s Investors Service has affirmed a local and foreign currency long-term issuer rating of Russia’s state-owned Vnesheconombank (VEB) at Ba1 with a negative outlook, the agency said late Monday.

Moody’s also downgraded VEB’s baseline credit assessment to B3 from B1 as a result of VEB’s deteriorating standalone credit metrics amidst the volatile operating environment in Russia.

“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,” Moody’s said.

The baseline credit assessment downgrade reflects the fact that VEB’s loan portfolio significantly deteriorated over the past two years. VEB’s troubled loans increased to 39.3% as of late 2014 from 19.7% as of late 2013, the agency said.

The negative outlook on VEB’s issuer ratings reflects current uncertainty regarding VEB’s future business model, Moody’s said. According to VEB’s management, the Russian government is now considering a package of support measures to promote VEB’s specialization as a development institution.

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