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Credit ratings for placing pension reserves are established

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At its 18 September 2020 meeting, the Bank of Russia Board of Directors, for the purpose of Bank of Russia Ordinance No. 5343-U, dated 5 December 2029, ‘On the Requirements for the Composition and Structure of Pension Reserves’ (hereinafter, the Ordinance), decided as follows:

1. For the purpose of paragraphs three and eight of Subclause 1.1.1 Clause 1.1 of the Ordinance, to establish the following credit ratings for a credit institution (excluding the credit institution where a subordinated deposit is placed): ruA- on the national rating scale for the Russian Federation in the classification of the rating agency JSC Expert RA (hereinafter, Expert RA) or A-(RU) on the national rating scale for the Russian Federation in the classification of ACRA JSC (hereinafter, ACRA).

2. For the purpose of paragraphs three and eight of Subclause 1.1.1 Clause 1.1 of the Ordinance, to establish the following credit ratings for a credit institution where a subordinated deposit is placed: ruAAA on the national rating scale for the Russian Federation in the classification of Expert RA or AAA(RU) on the national rating scale for the Russian Federation in the classification of ACRA.

3. For the purpose of paragraphs two and four of Subclause 1.1.3 Clause 1.1 of the Ordinance, to establish the following credit ratings for a bond issue and bond issuer (excluding credit institutions’ bonds and mortgage-backed bonds issued by mortgage agents): ruBBB+ on the national rating scale for the Russian Federation in the classification of Expert RA or BBB+(RU) on the national rating scale for the Russian Federation in the classification of ACRA.

To establish the following credit ratings for the surety (guarantor) on the specified bonds:

for Russian rated entities — ruBBB+ on the national rating scale for the Russian Federation in the classification of Expert RA or BBB+(RU) on the national rating scale for the Russian Federation in the classification of ACRA;

for foreign rated entities — sovereign credit rating for the Russian Federation in the relevant currency on the international rating scale by at least one of the following rating agencies: Fitch Ratings, S&P Global Ratings, Moody’s Investors Service (hereinafter, foreign rating agencies), decreased by three notches.

4. For the purpose of paragraphs two and four of Subclause 1.1.3 Clause 1.1 of the Ordinance, to establish the following credit ratings for the issue and the issuer of credit institutions’ bonds: ruA- on the national rating scale for the Russian Federation in the classification of Expert RA or A-(RU) on the national rating scale for the Russian Federation in the classification of ACRA.

To establish the following credit ratings for the surety (guarantor) on the specified bonds:

for Russian rated entities — ruA- on the national rating scale for the Russian Federation in the classification of Expert RA or A-(RU) on the national rating scale for the Russian Federation in the classification of ACRA;

for foreign rated entities — sovereign credit rating for the Russian Federation in the relevant currency on the international rating scale by at least one of the foreign rating agencies, decreased by two notches.

5. For the purpose of paragraph two of Subclause 1.1.3 Clause 1.1 of the Ordinance, to establish the following credit ratings for the mortgage-backed bonds issued by mortgage agents: ruAAA.sf on the national rating scale for the Russian Federation in the classification of Expert RA applied to assign credit ratings to structured finance instruments or AAA(ru.sf) on the national rating scale of the structured finance sector for the Russian Federation in the classification of ACRA.

To establish the following credit ratings for the issuer of the specified bonds as well as for the surety (guarantor) on the specified bonds:

for Russian rated entities — ruAAA on the national rating scale for the Russian Federation in the classification of Expert RA or AAA(RU) on the national rating scale for the Russian Federation in the classification of ACRA;

for foreign rated entities — sovereign credit rating for the Russian Federation in the relevant currency on the international rating scale by at least one of the foreign rating agencies.

6. For the purpose of paragraphs three and five of Subclause 1.1.3 Clause 1.1 of the Ordinance, to establish the following credit ratings for a bond issue (excluding mortgage-backed bonds issued by mortgage agents): ruA- on the national rating scale for the Russian Federation in the classification of Expert RA or A-(RU) on the national rating scale for the Russian Federation in the classification of ACRA.

To establish the following credit ratings for the surety (guarantor) on the specified bonds:

for Russian rated entities — ruA- on the national rating scale for the Russian Federation in the classification of Expert RA or A-(RU) on the national rating scale for the Russian Federation in the classification of ACRA;

for foreign rated entities — sovereign credit rating for the Russian Federation in the relevant currency on the international rating scale by at least one of the foreign rating agencies, decreased by two notches.

7. For the purpose of paragraph three of Subclause 1.1.3 Clause 1.1 of the Ordinance, to establish the following credit ratings for the issue mortgage-backed bonds issued by mortgage agents: ruAAA.sf on the national rating scale for the Russian Federation in the classification of Expert RA applied to assign credit ratings to structured finance instruments or AAA(ru.sf) on the national rating scale of the structured finance sector for the Russian Federation in the classification of ACRA.

To establish the following credit ratings for the surety (guarantor) on the specified bonds:

for Russian rated entities — ruAAA on the national rating scale for the Russian Federation in the classification of Expert RA or AAA(RU) on the national rating scale for the Russian Federation in the classification of ACRA;

for foreign rated entities — sovereign credit rating for the Russian Federation in the relevant currency on the international rating scale by at least one of the foreign rating agencies.

8. For the purpose of Subclause 1.1.4 Clause 1.1 of the Ordinance, to establish the following credit ratings for a bond issue and bond issuer: sovereign credit rating for the Russian Federation in the relevant currency on the international rating scale by at least one of the foreign rating agencies, decreased by three notches.

9. For the purpose of Subclause 1.1.5 Clause 1.1 of the Ordinance, to establish the following credit ratings for a securities issue and issuer: sovereign credit rating for the Russian Federation in the relevant currency on the international rating scale by at least one of the foreign rating agencies, decreased by three notches.

10. For the purpose of paragraph two of Subclause 1.1.6 Clause 1.1 of the Ordinance, to establish the following credit ratings for a bond issue and bond issuer (excluding bonds issued by foreign banks) as well as for the surety (guarantor) on the specified bonds:

for Russian rated entities — ruBBB+ on the national rating scale for the Russian Federation in the classification of Expert RA or BBB+(RU) on the national rating scale for the Russian Federation in the classification of ACRA;

for foreign rated entities — sovereign credit rating for the Russian Federation in the relevant currency on the international rating scale by at least one of the foreign rating agencies, decreased by three notches.

11. For the purpose of paragraph two of Subclause 1.1.6 Clause 1.1 of the Ordinance, to establish the following credit ratings for the issue and issuer of foreign banks’ bonds as well as for the surety (guarantor) on the specified bonds:

for Russian rated entities — ruA- on the national rating scale for the Russian Federation in the classification of Expert RA or A-(RU) on the national rating scale for the Russian Federation in the classification of ACRA;

for foreign rated entities — sovereign credit rating for the Russian Federation in the relevant currency on the international rating scale by at least one of the foreign rating agencies, decreased by two notches.

12. For the purpose of paragraph three of Subclause 1.1.6 Clause 1.1 of the Ordinance, to establish the following credit ratings for a bond issue as well as for the surety (guarantor) on the bonds:

for Russian rated entities — ruA- on the national rating scale for the Russian Federation in the classification of Expert RA or A-(RU) on the national rating scale for the Russian Federation in the classification of ACRA;

for foreign rated entities — sovereign credit rating for the Russian Federation in the relevant currency on the international rating scale by at least one of the foreign rating agencies, decreased by two notches.

13. For the purpose of Subclause 1.1.13 Clause 1.1 of the Ordinance, to establish the following credit ratings for the central counterparty: ruA- on the national rating scale for the Russian Federation in the classification of Expert RA or A-(RU) on the national rating scale for the Russian Federation in the classification of ACRA.

14. For the purpose of Subclause 1.1.16 Clause 1.1 of the Ordinance, to establish the following credit ratings for an insurance company: ruA- on the national rating scale for the Russian Federation in the classification of Expert RA or A-(RU) on the national rating scale for the Russian Federation in the classification of ACRA.

15. For the purpose of Subclause 2.1.15 Clause 1.1 of the Ordinance, to establish the following credit ratings for an equity issuer: ruA- on the national rating scale for the Russian Federation in the classification of Expert RA or A-(RU) on the national rating scale for the Russian Federation in the classification of ACRA.

16. For the purpose of this decision, to use the following types of long-term credit ratings assigned by foreign credit rating agencies:

ratings by Fitch Ratings — Issuer Default Rating, Corporate Finance Obligations Rating, Long-term Rating of Structured Finance, and Project Finance and Public Finance Obligations;

credit ratings by S&P Global Ratings — Issuer Credit Rating, and Long-term Issue Credit Rating;

credit ratings by Moody’s Investors Service — Issuer Rating, Corporate Family Rating, Structured Finance Issuer Rating, Long-Term Corporate Obligation Rating, Structured Finance Long-Term Rating, and Bank Deposit Rating. Corporate Family Rating is used with regard to an entity only if this rating is directly assigned to this entity.

17. For the purpose of this decision, to use the following types of ratings assigned by rating agencies Expert RA or ACRA:

Expert RA — credit ratings of debt instruments, credit ratings and financial strength rating of insurance companies assigned on the national rating scale for the Russian Federation as well as credit ratings assigned on the national rating scale for the Russian Federation with regard to structured finance instruments. Financial strength ratings of insurance companies are used only for the purpose of Subclause 1.1.16 Clause 1.1 of the Ordinance;

ACRA — credit ratings assigned on the national rating scale for the Russian Federation or on the national rating scale of the structured finance sector for the Russian Federation.

18. For the purpose of this decision, a rating notch means its gradation expressed through figures and symbols (‘+’, ‘-’, 1, 2, 3).

19. This decision shall be applied from the effective date of this Ordinance.

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Regulator Information

Abbreviation: CBR
Jurisdiction: Russian Federation

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