Putin’s Russia Trading as Junk Awaits Downgrades to Match - Bloomberg

Putin’s Russia Trading as Junk Awaits Downgrades to Match - Bloomberg:



"As rating companies weigh cutting Russia’s investment-grade status as soon as today, traders of credit-default swaps are already treating the nation as junk.



The cost of insuring Russia’s bonds against non-repayment for five years jumped 61 basis points this year to 538, according to data compiled by Bloomberg. That makes the nation’s debt the fifth-riskiest globally, above speculative-grade countries including Lebanon, Egypt and Portugal.



While Societe Generale SA said that Fitch Ratings, which ranks Russia two levels above junk, will probably cut by one step today, Standard & Poor’s signalled last month it may drop the country below investment grade within 90 days. With plunging oil prices and sanctions over President Vladimir Putin’s support for Ukraine separatists tipping the economy into a recession, the nation’s low levels of public debt and foreign-currency war chest probably won’t prevent a downgrade."



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