On establishing long-term credit ratings for investing pension savings and military residential savings

The Bank of Russia Board of Directors took the following decision:

1. For the purposes of Para. 2 and 3 Clause 1.1.2 of Bank of Russia Regulation No. 580-P, dated 1 March 2017, ‘On Additional Restrictions on Investing Pension Savings Placed with a Non-governmental Pension Fund Providing Mandatory Pension Insurance; on Cases When a Management Company Acting as a Trustee of Pension Savings Has the Right to Execute Repo Agreements; on Requirements Aimed at Risk Mitigation the Observance Whereof Entitles the Management Company to Execute Derivative Contracts; on Additional Requirements for Credit Institutions with Which Servicemen Pension and Housing Savings are Placed; and on Additional Requirements for the Management Company under Pension Savings Trust Management Agreement to Finance Funded Pension’ (hereinafter, the Regulation), the following credit rating shall be assigned to the bond issue (including subordinated bonds) of credit institutions acquired after 13 July 2017 at the expense of pension savings: A-(RU) on the national rating scale for the Russian Federation in the classification of the rating agency ACRA (JSC) (hereinafter, ACRA)

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 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);

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, the foreign rating agencies), decreased by two notches;

1. For the purpose of subparagraph three of Clause 1.1.2 of the Regulation, to establish the following credit ratings for bond issues (excluding credit institutions’ bond issues) acquired at the expense of pension savings after 13 July 2017 (in absence of the issue rating, the rating of the issuer of such bonds or the rating of 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 respective currency on the international rating scale by at least one of the foreign rating agencies, decreased by five notches;

1. For the purposes of the subparagraph two of Para. 1.1.2 of Clause 1.1 of the Regulation, as regards issues of subordinated bonds of credit institutions’ bonds acquired at the expense of pension savings before or on 13 July 2017 (in absence of the issue rating, the rating of the issuer of such bonds or the rating of surety (guarantor) for such bonds), the credit rating which meets Para. 1 of this decision or which meets credit rating requirements as per the Bank of Russia Board of Directors’ decision dated 23 December 2016 for the purposes of the third subparagraph 1.4.7 of Clause 1.4 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 Mandatory 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’, hereinafter, Regulation No. 451-P);
2. For the purposes of subparagraph 3 of Para. 1.1.2 Clause. 1.1 of the Regulation, for bond issues (excluding credit institutions’ subordinated bonds) acquired at the expense of pension savings before or on 13 July 2017 (in absence of the issue rating, the rating of the issuer of such bonds or the rating of surety (guarantor) for such bonds), to establish credit rating compliant with the requirements of Clause 1 or 2 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 for the purposes of subparagraph 1.4.7 of Clause 1.4 of Regulation No. 451-P;
3. For the purposes of subparagraph 1.1.6 Clause 1.1 of the Regulation, the credit rating of a credit organisation wherein the subordinated deposit is placed, shall be no less than ruAAA on a national rating scale for the Russian Federation JSC Expert RA or not less AAA (RU) on a national rating scale for the Russian Federation in the classification of ACRA;
4. For the purposes of subparagraph six Para. 1.4.4 of Clause 1.4 of the Regulation, to establish the following credit ratings for bond issues (excluding credit institutions’ subordinated bond issues) acquired at the expense of pension savings after 13 July 2017 (in absence of the issue rating, the rating of the issuer of such bonds or the rating of 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 — a sovereign credit rating for the Russian Federation in respective currency on the international rating scale by at least one of the foreign rating agencies, decreased by three notches;

1. For the purposes of subparagraph six Para. 1.4.4 of Clause 1.4 of the Regulation, for bond issues acquired at the expense of pension savings before or on 13 July 2017 (in absence of the issue rating, the rating of the issuer of such bonds or the rating of surety (guarantor) for such bonds), to establish a credit rating compliant with the requirements of Clause 6 of this decision or with respective requirements for credit ratings set by the decision of the Bank of Russia Board of Directors dated 23 December 2016 for the purposes of subparagraph 1.5.6 Clause 1.5 of Regulation No. 451-P;
2. For the purposes of Clause 1.6 of the Regulation, to establish the following issuer’s credit rating as regards securities referred to in Para. 2 Clause 1 Article 36.15 of Federal Law No. 75-FZ, dated 7 May 1998, ‘On Non-governmental Pension Funds’ and those acquired at the expense of pension savings after 13 July 2017:

For Russian rated entities — ruAAA on the national rating scale for the Russian Federation in the classification of JSC Expert RA or AAA(RU) on the national rating scale for the Russian Federation in the classification of ACRA;

For foreign rated entities — a sovereign credit rating for the Russian Federation in respective currency on the international rating scale by at least one of the foreign rating agencies;

1. For the purposes of Clause 1.6 of the Regulation, the credit rating of the issuer of securities referred to in subparagraph 2 Para. 1 Article 36.15 of Federal Law No. 75-FZ, dated 7 May 1998, ‘On Non-governmental Pension Funds’ and those acquired at the expense of pension savings before and on 13 July 2017 should meet the requirements of Clause 8 of this decision or the respective requirements for credit ratings set by the decision of the Bank of Russia Board of Directors, dated 23 December 2016, for the purposes of Para. 1.6 of Regulation No. 451-P;
2. For the purposes of subparagraph 2.1.3 of Clause 2.1 of the Regulation, to establish the following credit rating for credit institutions: 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; or, before and on 13 July 2017, the credit institution’s credit rating should meet the credit requirements set by the decision of the Bank of Russia Board of Directors, dated 23 December 2016 for the purposes of subparagraph 2.1.3 Para. 2.1 of Regulation No. 451-P;
3. For the purposes of this decision, the following types of credit ratings assigned by foreign 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.

1. The rating in the classification of S&P Global Ratings with the ‘p’ index specifying that the rating is applicable for obligations under payment of value of bonds and applies only to issues of bonds whereupon interest rate (coupon) payments are calculated according to a formula with variables (except for interest rates and the rate of inflation).
2. For the purposes of this decision, the following types of ratings assigned by rating agencies JSC Expert RA or ACRA are used:

Ratings by the rating agency JSC Expert RA — credit ratings assigned to Russian banks, regional and municipal authorities on the national rating scale for the Russian Federation;

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

1. For the purpose of this decision, a rating notch means its gradation expressed through figures and symbols (‘+’, ‘-’, 1, 2, 3).
2. This decision is subject to implementation from the date it becomes effective.

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03.07.2017 00.00.00