According to S&P, Russia’s foreign currency sovereign credit rating has become SD/SD, which means selective default. This was due to the fact that the Russian government repaid its obligations to European bondholders in rubles instead of US dollars. S&P believes that the situation will not change after the end of the 30-day grace period. There is also no opportunity for Eurobond holders to convert payments in rubles into US dollars without significant losses. Moreover, the sanctions pressure on the Russian Federation is planned to be further strengthened in the coming weeks. In this regard, Russia will not have the technical ability to fulfill the terms of its obligations to foreign bondholders.
At the same time, the rating of the Russian Federation in local currency remains at the same level – CC / C, which stands for pre-default. This is not the first downgrade of Russia’s credit rating since the start of the special operation. Back in early March, Russia received B3 according to Moody’s and B according to Fitch.