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The Central Bank of the Russian Federation (Bank of Russia)

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Information Notice

On establishing long-term credit ratings of certain assets eligible for calculating capital of management companies of investment funds, unit investment funds and non-governmental funds and applicants for management company licence

At its 1 June 2018 meeting, the Bank of Russia Board of Directors decided, for the purposes of Bank of Russia Ordinance No. 4075-U, dated 19 July 2016, ‘On the Capital Requirements for Management Companies of Investment Funds, Unit Investment Funds, Non-governmental Pension Funds, and Applicants for Management Company Licences’:

1. To establish, for the purposes of paragraph two and three of Clause 2 of the Ordinance, the following credit ratings for credit institutions: ruA- on the national rating scale for the Russian Federation in the classification of the rating agency JSC Expert RA (hereinafter, JSC Expert RA) or A-(RU) on the national rating scale for the Russian Federation in the classification of ACRA JSC (hereinafter, ACRA).

2. To establish, for the purposes of paragraph four of Clause 2 of the Ordinance, the following credit ratings assigned to the bond issue of credit institutions acquired as part of the capital of a management company after 13 July 2017: ruA- on the national rating scale for the Russian Federation in the classification of JSC Expert RA or A-(RU) on the national rating scale for the Russian Federation in the classification of ACRA (JSC).

To establish the following credit ratings for the issuer or surety (guarantor) of such bonds:

for Russian rated entities — ruA- on the national rating scale for the Russian Federation in the classification of JSC 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 respective 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 two notches.

3. For the purposes of paragraph four of Clause 2 of the Ordinance, to establish the following credit ratings for bond issues (excluding credit institutions’ bond issues) acquired as part of the capital of a management company after 13 July 2017 (in absence of the issue rating, the credit rating of the issuer of such bonds or the surety (guarantor) for such bonds):

for Russian rated entities — ruBBB+ on the national rating scale for the Russian Federation in the classification of JSC 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 respective currency on the international rating scale by at least one of the foreign rating agencies, decreased by three notches.

4. For the purposes of paragraph four of Clause 2 of the Ordinance, for bond issues acquired as part of the management company’s capital before or on 13 July 2017 (in absence of the issue rating, the rating of the issuer of such bonds or surety (guarantor) for such bonds), to establish credit rating complying with the requirements of Clause 2 or 3 of this decision or with respective requirements for credit ratings set by the decision of the Bank of Russia Board of Directors as of 23 December 2016.

5. To establish, for the purposes of paragraph seven of Clause 2 of the Ordinance, the following credit ratings for the debtor:

for Russian rated entities — ruA- on the national rating scale for the Russian Federation in the classification of JSC 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 respective currency on the international rating scale by at least one of the foreign rating agencies, decreased by two notches.

6. To use the following types of credit ratings 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 such entity.

7. To use the following types of credit ratings by JSC Expert RA and ACRA:

ratings by JSC Expert RA — bank credit ratings, credit ratings of regional and municipal authorities of the Russian Federation, credit ratings of non-financial companies, credit ratings of holding companies, credit ratings of special purpose vehicles, credit ratings of microfinance organisations, credit ratings of leasing companies and credit ratings of debt instruments assigned on a national rating scale for the Russian Federation;

ratings by ACRA — credit ratings assigned on the national rating scale for the Russian Federation.

8. A rating notch is construed as its gradation expressed through figures and symbols (‘+’, ‘-’, 1, 2, 3).

9. This decision is to be applied from the day it is published on the Bank of Russia website.

15 June 2018

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