MOSCOW, August 4 (RIA Novosti commentator Peter Lavelle). The Fitch upgrade of Russia's sovereign rating to BBB with a stable outlook was widely expected following the country's debt repayment of $13 billion to the Paris Club this week.
Fitch said the upgrade was also based on Russia's significant macroeconomic performance, coupled with the debt repayment and improvements in the country's financial ratios. Importantly, the agency said these three issues outweigh political risk and lack of structural and institutional reform.
The upgrade should improve sentiment in the Russian market and facilitate a further tightening of sovereign and quasi-sovereign bond spreads. It is quite possible that Moody's (which has retained Russia's rating of positive outlook with Baa3 rating) will upgrade 4Q and S&P (BBB-) will follow this trend in December-February.