On setting long-term solvency ratings for certain assets accepted to calculate NPF own funds

The Bank of Russia Board of Directors took a decision to set the following long-term solvency ratings:

for the purposes of Paragraph 4 of Clause 2 of Ordinance No. 4028-U, dated 30 May 2016, ‘On the Procedure for Calculating Own Funds of Non-governmental Pension Funds’, registered by the Ministry of Justice of the Russian Federation on 24 June 2016, registration No. 42635 (hereinafter, the Ordinance) the long-term solvency rating of a bond issue (when there is no issue rating — issuer’s or backer’s (guarantor’s) rating) by classification of at least one rating agency (Fitch-Ratings, Standard & Poor’s, Moody’s Investors Service) shall be no lower than the sovereign credit rating of the Russian Federation assigned by a corresponding rating agency cut by three levels or be at least A++ by the national scale by Expert RA rating agency classification;

for the purposes of Paragraph 7 of Clause 2 of the Ordinance the long-term solvency rating of a borrower by classification of at least one rating agency (Fitch-Ratings, Standard & Poor’s, Moody’s Investors Service) shall be no lower than the sovereign credit rating of the Russian Federation in corresponding currency assigned by a corresponding rating agency cut by two levels;

for the purposes of Paragraph 6 of Clause 2 of the Ordinance the long-term solvency rating of credit institutions by classification of at least one rating agency (Fitch-Ratings, Standard & Poor’s, Moody’s Investors Service) shall be no lower than the sovereign credit rating of the Russian Federation in corresponding currency assigned by a corresponding rating agency cut by two levels.

For the purposes of this decision following types of ratings by foreign rating agencies are used:

Fitch Ratings — Issuer Default Rating, Corporate Finance Obligations Rating, Long-term rating of structured finance, project finance and public finance obligations);

Standard & Poor’s ratings — Issuer Credit Rating and Long-Term Issue Credit Rating;

Moody’s Investors Service ratings — 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 applies to an entity only when such rating is assigned directly to this entity.

For the purpose of this decision the rating scale level is understood as a gradation expressed with numbers and symbols (‘+’, ‘-’, 1, 2, 3).

This decision becomes effective the day it is posted on the Bank of Russia website.

The reference to the Press Service is mandatory if you intend to use this material.

02.08.2016 00.00.00