On establishing long-term credit ratings for investing pension savings

The Bank of Russia Board of Directors established the following long-term credit ratings:

For the purpose of paragraph three of Clause 1.4.1 of Bank of Russia Regulation No. 451-P, dated 25 December 2014, ‘On Additional Restrictions on Investing Pension Savings Placed with a Non-governmental Pension Fund Providing Compulsory Pension Insurance, Additional Requirements for Credit Institutions with Which Servicemen Pension and Housing Savings are Placed, and Additional Requirements for Management Companies under Pension Savings Trust Management Agreement’, registered with the Ministry of Justice of the Russian Federation on 23 January 2015, No. 35661 (hereinafter referred to as the Regulation), the long-term credit rating of subordinated bond issue in the classification of at least one of the rating agencies Fitch Ratings, S&P Global Ratings and Moody’s Investors Service (hereinafter referred to as the foreign rating agencies) shall be no lower than the sovereign rating of the Russian Federation in the corresponding currency assigned by the respective foreign rating agency decreased by two notches. If subordinated bond issue is not rated, the long-term credit rating of the issuer’s subordinated bonds in the classification of at least one of the foreign rating agencies shall be no lower than the sovereign rating of the Russian Federation in the corresponding currency assigned by the respective foreign rating agency decreased by two notches;

For the purpose of paragraph four of Clause 1.4.1 of the Regulation, the long-term credit rating of the issue (issuer, if the issue is not rated) of securities other than subordinated bonds in the classification of at least one of the foreign rating agencies shall be no lower than the sovereign rating of the Russian Federation in the corresponding currency assigned by the respective foreign rating agency decreased by five notches, or the national credit rating shall be no lower than А(I) in the classification of Expert RA, or the Russian national credit rating shall be no lower than BB+(RU) in the classification of the Analytical Credit Rating Agency (ACRA);

For the purpose of paragraph six of Clause 1.4.1 of the Regulation, the long-term credit rating of a legal entity which secures all bond liabilities in the classification of at least one of the foreign rating agencies shall be no lower than the sovereign rating of the Russian Federation in the corresponding currency assigned by the respective foreign rating agency decreased by three notches, or the national credit rating shall be no lower than А++ in the classification of Expert RA, or the Russian national credit rating shall be no lower than BBB+(RU) in the classification of the Analytical Credit Rating Agency (ACRA);

For the purpose of paragraph two of Clause 1.4.7 of the Regulation, the long-term credit rating of the issue (issuer, if the issue is not rated) of bonds, which were first placed and (or) publicly offered no earlier than the Regulation became effective, other than subordinated bonds of credit institutions and bonds of the Russian Federation, in the classification of at least one of the foreign rating agencies shall be no lower than the sovereign rating of the Russian Federation in the corresponding currency assigned by the respective foreign rating agency decreased by five notches, or the national credit rating shall be no lower than А(I) in the classification of Expert RA, or the Russian national credit rating shall be no lower than BB+(RU) in the classification of the Analytical Credit Rating Agency (ACRA); or the long-term credit rating of the warrantor (guarantor) of such bonds in the classification of at least one of the foreign rating agencies shall be no lower than the sovereign rating of the Russian Federation in the corresponding currency assigned by the respective foreign rating agency decreased by three notches, or the national credit rating shall be no lower than А++ in the classification of Expert RA, or the Russian national credit rating shall be no lower than BBB+(RU) in the classification of the Analytical Credit Rating Agency (ACRA);

For the purpose of paragraph three of Clause 1.4.7 of the Regulation, the long-term credit rating of the issue of subordinated bonds in the classification of at least one of the foreign rating agencies shall be no lower than the sovereign rating of the Russian Federation in the corresponding currency assigned by the respective foreign rating agency decreased by two notches; or if the subordinated bond issue is not rated, the long-term credit rating of the issuer’s subordinated bonds in the classification of at least one of the foreign rating agencies shall be no lower than the sovereign rating of the Russian Federation in the corresponding currency assigned by the respective foreign rating agency decreased by two notches; or the long-term credit rating of the warrantor (guarantor) of such bonds in the classification of at least one of the foreign rating agencies shall be no lower than the sovereign rating of the Russian Federation in the corresponding currency assigned by the respective foreign rating agency decreased by two notches;

For the purpose of Clause 1.4.8 of the Regulation, the long-term credit rating of credit institutions eligible for placing subordinated deposits shall be no lower than BBB+ in the classification of the rating agencies Fitch Ratings or S&P Global Ratings, or no lower than Baa1 in the classification of Moody’s Investors Service;

For the purpose of Clause 1.5.6 of the Regulation, the long-term credit rating of the issues (issuer, if the issue is not rated) of bonds in the classification of at least one of the foreign rating agencies shall correspond to the sovereign rating of the Russian Federation in the corresponding currency assigned by the respective foreign rating agency decreased by three notches, or the national credit rating shall equal А++ in the classification of Expert RA, or the Russian national credit rating shall equal BBB+(RU) in the classification of the Analytical Credit Rating Agency (ACRA);

For the purpose of Clause 1.6 of the Regulation, the long-term credit rating of the issuer of securities listed in paragraph two of Clause 1 of Article 36.15 of Federal Law No. 75-FZ, dated 7 May 1998, ‘On Non-governmental Pension Funds’, in the classification of at least one of the foreign rating agencies shall be no lower than the sovereign rating of the Russian Federation in the corresponding currency assigned by the respective foreign rating agency, or the national credit rating shall be no lower than А++ in the classification of Expert RA, or the Russian national credit rating shall be no lower than ААА(RU) in the classification of the Analytical Credit Rating Agency (ACRA);

For the purpose of Clause 2.1.3 of the Regulation, the long-term credit rating of a credit institution in the classification of at least one of the foreign rating agencies shall be no lower than the sovereign rating of the Russian Federation in the corresponding currency assigned by the respective foreign rating agency decreased by two notches, or the national credit rating shall be no lower than А-(RU) in the classification of the Analytical Credit Rating Agency (ACRA).

For the purpose of Clause 2.1.3 of the Regulation, if pension savings or servicemen housing savings were deposited in a credit institution before the Regulation became effective, with regards to this deposit the long-term credit rating of the credit institution in the classification of at least one of the foreign rating agencies shall be no lower than the sovereign rating of the Russian Federation in the corresponding currency assigned by the respective foreign rating agency decreased by three notches.

If the long-term credit rating of a credit institution was revoked and foreign states imposed restrictions on this credit institution, including a ban on operations with this credit institution, the respective rating assigned to the institution as of 1 March 2014 shall be used for the purpose of the Regulation, or the national long-term credit rating of this credit institution shall be no lower than A+(I) in the classification of Expert RA for the purpose of Clause 2.1.3 of the Regulation.

This decision takes into account the following credit ratings by foreign rating agencies:

Credit ratings by Fitch Ratings — issuer default rating, corporate finance obligations, and long-term rating of structured finance, 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. The corporate family rating shall be applied to the issuer only in case this credit rating is assigned directly to the issuer.

Credit ratings by S&P Global Ratings indexed ‘p’, indicating that the rating is established for obligations to pay the par value of bonds, shall be used only for bond issues for which the interest (coupon) is established as a formula with variables (except for interest rates and inflation rate).

For the purpose of this decision a rating notch means its gradation expressed through figures and symbols (‘+’, ‘-’, 1, 2, 3).

This decision is to become effective since it is published in the Internet.

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