On using credit ratings to compile Bank of Russia Lombard List
The Bank of Russia Board of Directors with due account of legal requirements for rating activities took the following decision.
1. Starting from 14 July 2017, when included in the Bank of Russia Lombard List (hereinafter, Lombard List), bonds issued by constituent territories of the Russian Federation and municipalities, as well as credit institutions (or their issuers) should have credit rating no less than ruBBB assigned by the credit rating agency Expert RA (JSC) or BBB(RU) assigned by the credit rating agency ACRA (JSC).
Apart from the said credit rating of securities issues (issuers), the Bank of Russia, while deciding on including securities in the Lombard List, will take into account the results of its assessment of the credit quality of the securities issues (issuers’ solvency), terms of their placement and circulation, and other material circumstances.
2. With regard to securities included in the Lombard List earlier the Bank of Russia decided that the market value of bonds of constituent territories of the Russian Federation and municipalities, as well as resident legal entities, whose issues (issuers) as of 13 July 2017 will not have credit ratings complying with the requirements for inclusion in the Lombard List effective as of 13 July 2017 (i.e., ratings assigned by foreign rating agencies) and as of 30 September 2017 — ratings complying with the requirements for inclusion in the Lombard List effective as of 30 September 2017 would be adjusted on the following terms:
from 1 October 2017, the discount for the said bonds will be set at 60% (the adjustment ratio — at 0.4);
from 1 January 2018, the said bonds will not be eligible as security on Bank of Russia lending and repo operations.
The decision on changed discounts (adjustment ratios) does not cover bonds secured by government guarantees of the Russian Federation or a solidary guarantee of AHML JSC (for mortgage-backed bonds).
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07.07.2017 00.00.00