Moody's places ratings of 51 Russian companies on review for downgrade

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Moody's Investors Service has placed the ratings of 51 Russian companies on review for downgrade.

The action, announced by the ratings agency on March 2, comes after it placed Russia and Ukraine's ratings on review for downgrade on February 25 after President Vladimir Putin approved an invasion of Ukraine.

Moody's currently has a Baa3 rating on Russia and B3 on Ukraine.

Also read: Russia Ukraine War News LIVE Updates

"Today's rating actions on the affected corporates are a direct consequence of the sovereign rating action and reflect Moody's view that a potential downgrade of Russia's sovereign ratings and lowering of its country ceilings could or would lead to downgrades of the affected corporates' ratings, because of their strong interlinkages with the sovereign rating," Moody's said in a statement on Mach 2.

"The review for downgrade, in particular, will take into account (1) Russia's sovereign ratings and country ceilings following the conclusion of the sovereign review; (2) the affected corporates' individual credit factors, including the effect of sanctions on their credit quality; and (3) the likelihood of potential state support to the corporates in the event of financial distress," it added.

The Russian companies affected by Moody's latest announcement include energy heavyweights Rosneft and Gazprom. The entire list of affected companies can be found here.

The invasion of Ukraine has hurt Russian companies hard, with economic sanctions driving down their share prices. Russian authorities have looked to soften the blow, with the government announcing a plan to purchase shares worth 1 trillion rubles of companies that have been sanctioned.

On February 25, Moody's had said that "serious concerns" around Russia's ability to manage the impact of the economic sanctions on the economy, government finances, and the financial system may result in a ratings downgrade.

"However, in the low likelihood that Moody's concluded that significant new economic and financial sanctions were to have a very limited impact on Russia's economy and financial buffers, one possible outcome of the review will be to confirm Russia's ratings with a negative outlook," the agency had said.