And Standard & Poor's. It has two headquarters - in New York and London, as well as 51 representative offices. The staff has 1,500 employees. Ratings assigned to 3,100 financial institutions, 1,600 banks, 1,400 insurance companies, 1,200 corporations, 89 governments and 45,000 municipalities. The company has existed since 1912 as a publishing house, and since 1924 as a rating agency.

Fitch Ratings assigns international and national ratings, which are officially referred to as Issuer Default Ratings.

"AAA" - the highest level of creditworthiness, the lowest expectations for credit risks. Assigned only in case of exceptionally high ability to repay financial obligations in a timely manner.

"AA" - very high creditworthiness, very low credit risk expectations and very high ability to repay financial obligations on time.

"A" - high creditworthiness, low expectations for credit risks, high ability to repay financial obligations in a timely manner.

"BBB" - good creditworthiness, low this moment expectations for credit risks, adequate ability to repay financial obligations in a timely manner. This rating level is the lowest among investment grade ratings.

"BB" - speculative rating. The 'BB' rating indicates that there is room for credit risk to develop, especially as a result of negative economic changes that may occur over time. However, alternative business or financial resources may be available to companies to enable them to meet their financial obligations. Securities rated at this level are investment securities.

"B" is a largely speculative rating. For issuers and valuable papers'B' ratings indicate that there are significant credit risks, but a limited safety cushion remains. At the moment, financial obligations are met, but the ability to continue payments depends on a stable and favorable business and economic environment.

"CCC" - securities obligations are met, default appears to be a real possibility. The ability to meet financial obligations depends entirely on a stable and favorable business or economic environment.

"CC" - liabilities, default appears probable.

"C" - obligations are fulfilled, default seems inevitable.

"RD" - this rating level indicates that the issuer has not made timely payments (taking into account the applicable grace period) for some, but not all of the main part of the obligations and continues to make payments for other types of obligations.

2. The national rating is set in the same way, but in the format "AAA(xxx)", "AA(xxx)", "A(xxx)", etc. The suffix indicates the country in which it is assigned. International ranking organizations cannot be higher than the country rating. The national rating is relative, for it the highest rating scale is the most reliable borrower in the local market, that is, the state.

In addition, Fitch has an additional gradation for national ratings - an 'E(xxx)' rating, which indicates that there is not enough information to assign. This category is used if the rating was previously suspended due to the lack of documentation from the issuer necessary for observations and data support.

Both international and national ratings can be supplemented with a rating watch mark (“under control”), as well as the so-called forecast - a possible revision within a year or two. The rating outlook can be positive, stable or negative. A plus (+) or minus (-) sign is used to indicate an intermediate grade.

What is a credit score?

Analysts of the agency, based on a variety of sources of information, compile credit ratings , exposing the issuer of debt obligations a kind of assessment of solvency. Those. credit rating - this is this assessment, "compressed" in a short letter expression with a certain financial sense. The higher it is, the more reliable the object for investment, but also the lower its potential yield on debt instruments (bills, bills).

World rating agencies

• Standard & Poor's

• Moody's Agency

• Fitch Agency

international, according to which debt issuers are compared with other countries or foreign companies;

national, by which issuers are compared within one country

Depending on the term of the creditworthiness forecast, a long-term rating (long term, for a period of more than a year) and short-term (short term, less than a year) are distinguished. The latter is associated with the long-term and changes (increases or decreases) synchronously with it.

And, finally, there are types of ratings in foreign (foreign) and local national (local) currency. For one issuer, they may differ if there are different conditions for fulfilling obligations in the national currency relative to foreign ones.

The main indicator that investors pay attention to is the long-term foreign currency rating. Further, the main attention in the article will be given to him.

S&P credit rating

The rating value ranges from the best "AAA" to the worst "D". Signs "+" or "-" (plus / minus) can be added to the letter designation from "AA" to "CCS". They reflect a slightly better or slightly worse position of the issuer within the same rating class. For example, an issuer with an AA+ rating is slightly more reliable for an investor than an issuer with an AA rating. Accordingly, the issuer "AA-" is less reliable for investments than "AA".

• positive (Positive) rating value can be increased;
• negative (Negative) - lowered;
• stable (Stable) - the value most likely will not change;
• developing (Developing) - the value can be both increased and decreased.

Forecasting horizon - from 6 months to 2 years.

S&P rating scale

speculative (more risky group of issuers); this group's ratings are sometimes referred to as "junk".

Letter and alphanumeric (A-1, A-2, A-3, etc.) designations in brackets refer to the short-term rating scale. Instead of the last two lines, other designations can be specified:

R - due to the unfavorable financial condition, the issuer is under the supervision of regulators, which may decide in favor of the advantage of fulfilling one obligation over others;

• SD - the issuer cannot redeem one obligation or category of obligations, but redeem others;

D - the issuer is unable to fulfill all or almost all obligations.

How to find out the rating calculated by S&P?

From the agency's website:

http://www.standardandpoors.com/home/en/us — English version;

http://www.standardandpoors.com/home/ru/ru - Russian version

On the main page on the left there is a search bar, under which you need to select a search parameter:

the name of the country or organization ("entity");

• security ticker (“ticker”);

security code (CUSIP, CINS, ISIN).

After that, you need to enter the required name in the search bar and select the desired one from the proposed pop-up options. If the inscription “NR” appears on the issuer, it means that the rating was not assigned. However, at the first access, the system will require registration:

After going through an easy procedure and receiving a confirmation letter to the specified email address, you can enter the name of the organization of interest to us in the search box (“Find a Rating ...” field). If we search for the Interactive Brokers broker, we will see the following results for today:

Local Currenty LT and ST denote the broker's long-term and short-term local currency ratings, while Local Currenty LT and ST denote the same foreign currency ratings. The table shows that the broker has a high reliability with a slightly higher short-term rating, as well as a stable long-term outlook (the penultimate column of CreditWatch/Outlook) made at the end of 2014. Here are the data for today Russian Federation:

Quite expectedly, the country's rating in national currency (rubles) turns out to be noticeably higher than in foreign (primarily in dollars). In addition, it is clear that, according to the agency, the creditworthiness of the broker considered earlier is higher than that of Russia as a whole - if, as common denominator choose dollar.

We periodically raise the question of the political bias of such ratings - I personally consider them quite objective and based both on historical data (remember the default of 1998 or the recent December 2014) and on the real state of affairs. But you don't have to agree with me.

Probability of default on corporate bonds for 1981-2013 in percent:

Moody's credit rating

Numbers 1,2,3 can be added to categories from "Aa" to "Saa". The unit "says" that the issuer occupies the top line in its rating category (for example, "Aa"). Two is in the middle. Three - at the bottom of the rating category. Such a rating is designated as follows: for example, "Aa1", "B2", "Caa3".

In addition to calculating the value, the agency also provides long-term and short-term rating forecasts - as does S&P.

The short-term rating, other than the indeterminate NP (no short-term credit rating), can range from P-1 (Prime-1, excellent short-term repayment capacity) to P-3 (Prime-3, acceptable short-term repayment capacity). Relative to the Moody's long-term rating table above, all Prime values ​​shown fall into the investment category, i.e. with an issuer rating of at least Baa.

How can I find out the rating calculated by Moody's?

https://www.moody's.com/ - English version;

https://www.moodys.com/pages/default_ee.aspx - version in Russian

The search field is located on the main page of the site in the upper left part. In this field, you must enter the name of the country or company you are looking for, or the security ticker. After that, a drop-down list of the most suitable options will be displayed. By clicking on the required one, we automatically move to the page with the ratings of the issuer we are looking for. The very first in the generated list is a long-term foreign currency rating.

If an agency user visits the site for the first time, in order to search for a rating, as in the case of S&P, it will be necessary to register once, including by ticking the “I agree to the terms of use of the site” checkbox. I managed to do this only by squandering the agreement to the end. After filling in a few lines and confirming registration by e-mail(by clicking on the link) you will be automatically redirected to the Moody's website already under your login. If this did not happen, then the specified email should be the login. Let's look for the rating of the Russian Federation:

This shows that Russia's long-term foreign currency rating is designated as Ba1, i.е. stands just on the verge of investment and speculative categories. At the same time, the short-term rating has not been determined, the indicated forecast is negative, which is quite at odds with the stable forecast from S&P (although both were made in 2016 with a difference of about half a year).

In total, despite the many evaluation parameters, the ratings are relatively subjective. However, for Moody’s, a convenient indicator is to view the rating history of the issuer, for which you need to switch to the “Rating” tab:

Here you can see how, having fallen to the default level in 1998, Russia's long-term rating in the national currency from 2000 to 2009 began to grow, which was caused by an increase in oil prices. Its stabilization at high levels by 2010 also stopped Russia's rating, and the fall in the price of a barrel, along with the devaluation of the ruble in December 2014, led to some downgrade. "Domestic" denotes a domestic rating in national currency, "Foreign" - in foreign. "Senior Unsecured" can be translated as senior unsecured debt obligations: in national or foreign currency, respectively.

In total, you can select and view 5 types of rating at once - but they are close to 100%, so I will limit myself to what is shown in the picture. Pressing " Issuer Outlook" you can also see the history of the company's forecasts for the future issuer rating. In the case of foreign issuers, the English version may sometimes be more productive.

Fitch Ratings credit rating

The rating scale of this agency is similar to the S&P scale and has an alphanumeric designation. The sign "+" or "-" is added to the ratings from "AA" to "B". Information about the rating of a particular issuer can be found on the following websites (after registration):

https://www.fitchratings.com/site/home - English version

http://www.fitchratings.ru/ru/ - Russian version

Let's choose the Russian version. As in previous cases, you must go through the formal registration procedure by clicking on "Create Account". There are a few more fields to fill in than in previous systems, but it’s easy to deal with them - the data is not checked, so you can write any phone numbers and home address (unlike email, which will receive confirmation).

After filling in everything and putting two checkmarks at the bottom, we receive a confirmation letter to our inbox and click on the link in it. Then you can return to the main page and enter your username and password in the upper right corner. Once logged in, let's try to find Russia's rating there by entering "russia" - unlike S&P and Moody's, there are no pop-up hints here yet. We get the following results:

In fact, the Fitch agency is the only one of all three that allows you to search in Russian - i.e. in the search bar, you can also type "Russian Federation". Although it is better to use the English version of the site to search for the rating of foreign issuers (the item "Issuers" there will correspond to " ENTITIES" - but in general, according to my observations, of all three systems, this one is the most capricious in displaying information). Click on the lowest issuer:

As can be seen from the table, the description of the rating is in Russian. The first two lines indicate liabilities in foreign currency, the first line can be considered the most important for the issuer's assessment. By clicking on "Rating history" at the bottom right, you can see the history of assigning a rating to the issuer (similar to Moody's, only there the history is presented in the form of a graph). The outlook for the issuer is indicated as a colored icon to the right of the rating value:

Those. For Russia, Fitch has a stable outlook for today. Letter designations can be decrypted as follows:

In parentheses, as before, is the short-term rating.

Comparison of ratings of world agencies

Three of the world's most popular agencies that assign their ratings were discussed above. The importance of this action can hardly be overestimated - millions of investors and multibillion-dollar capitals are guided by them. And although in estimates, and especially in forecasts, the data of agencies may differ from each other, with respect to large issuers, the discrepancies are almost never significant. At the end of the article, I draw a table of correspondence of the ratings of all three agencies relative to each other:

What is a credit score individual- clear. This is to return loans received from banking organizations. This indicator is calculated by banks to determine the appropriateness of providing a loan to a particular person.

If we increase the scale, we will get the credit rating of the enterprise. It will be of interest to both partner firms and investors.

What is the credit rating of countries?

The same concept has much more information load if applied to a more complex economic organization, such as country. Credit reflect the risk of investing in the infrastructure of the state. Based on this indicator, one can draw conclusions about whether the state will be able to answer for its own. Investors, when making decisions on large investments in enterprises or industries, must necessarily take into account the current values ​​of the credit rating.

But at the same time, it is essentially a prediction. It does not give 100% guarantees of return on investment, and therefore cannot be an absolute indicator of reliability. When making investment decisions, the credit rating of countries should be considered in conjunction with other factors confirming the feasibility of such investments.

Who is authorized to determine credit ratings?

The parameters we are studying can be national and international. The first are determined by the national ones. In Russia, these are Rus-Rating, Expert RA, National Rating Agency and others, in Ukraine - Credit Rating and Standard Rating. They have authority only within their own country.

The data of international rating companies cause much more confidence:

• Moody's.
• Standard & Poor's (S&P).
• Fitch.

They were created in the United States at the beginning of the last century, but received worldwide recognition and entered the international level.

These organizations determine the international credit ratings of countries, industries, enterprises, banking organizations, issue related forecasts, and also analyze financial markets.

Credit rating designation

Each rating agency has defined its own scale of designations. The meaning of the main concept has a literal definition, and intermediate categories on the S&P and Fitch scale are distinguished by “+” and “-” signs, which differ little in value from the numbers on the Moody's scale.

What is a rating agency forecast?

- Positive outlook- means that in the near future the rating is likely to increase.

- Stable- does not portend changes.

- Negative- likely downgrading of the credit rating.

In the case when there is the same probability of both a decrease and an increase in the indicator, determine developing forecast.

How has the credit rating of Ukraine and Russia changed over the past year?

In 2014-2015, events occur in these countries that provoke a decrease in the indicator under consideration. And the first results are already visible.

The credit rating of the Russian Federation was downgraded by Moody's from Baa1 to Baa2 at the end of 2014. In addition, there is a possibility of its further downgrade - the outlook is negative. Standard & Poor's also reduced it from BBB- to BBB + in foreign, and from BBB to BBB- Fitch at the beginning of 2015 made a quite predictable decline from BBB to BBB - still with the same negative outlook.

Ukraine, according to international rating agencies, is in a pre-default state. At the beginning of 2015, Fitch assigned it a negative MA value. Credit rating of Ukraine in foreign currency, according to Standard & Poor's, at the end of 2014 was downgraded from CCC to CCC-.

Can rating agencies be trusted?

In a time of rampant corruption at all levels, the question arises: "How accurate are the data of the rating organizations? Can they be trusted?" Indeed, a "twisted" credit rating of countries can greatly affect the situation in the field of global investment and direct large investment flows in the wrong direction. If the rating data used by the investor side is false, then this calls into question the relevance of investments and sooner or later will be reflected in profit.

The aforementioned rating agencies have worked hard for years, earning global credibility and credibility. Now their job is to present as truthful and up-to-date information to maintain their status. The assigned ratings cannot be falsified in any way, so they can be used as reliable for market analysis.

The rating agency (RA) Standard & Poor's (S&P) is an international company that specializes in research and assessment of the creditworthiness of securities issuers. This agency provides such a service as the assignment of an international credit rating. Her customers are financial companies, firms, states. The presence of a rating provides an opportunity for issuers to offer their own to a fairly wide range of investors. A credit score makes a lender more famous and enhances their reputation.

Characteristics of RA "Standard & Poor's"

This education is subsidiary American "McGraw-Hill", which is engaged in research of financial market analytics.

The history of this organization has about 150 years. Representative offices of RA "Standard & Poor's" are located in 23 countries of the world. This organization is also known as the founder and editor of the Australian S&P 200 and the US S&P500.

Functions of RA "Standard & Poor's":

Oversight;

Informative;

Regulatory;

prognostic.

Services of RA "Standard & Poor's":

implementation of analytical information and the results of their research to investors.

Ratings of RA "Standard & Poor's"

This organization uses the following letters to indicate the long-term rating of the so-called "safe investments":

A, A+, A- - such credit ratings are characterized as "reliability above average", with sufficiently effective protection factors. A credit rating with the designation A- informs that during economic crises there are risks of non-payment of the principal debt or dividends on it.

ВВВ+, ВВВ, ВВВ- - credit ratings of the level of "reliability below average", in which the probability of repayment of a loan and interest is considered adequate, and the degree of risk varies depending on the stage of development of the country's economy.

Speculative or, in other words, "junk", non-investment ratings of RA "Standard & Poor's":

B+, B, B- - the degree of financial protection varies depending on external financial and economic conditions and on the stages economic development states.

Credit rating is an independent and reliable assessment of an issuer's creditworthiness, on the basis of which market participants can make informed financial decisions. This may entail a reduction in the issuer's costs of attracting borrowed money. For those issuers that raise funds against third-party guarantees, a credit rating may reduce the cost of such a guarantee or raise funds more efficiently without purchasing a guarantee.

In recent decades, credit ratings have become a universally recognized and convenient benchmark for determining the degree of creditworthiness of federal governments, regional administrations, banks, and non-financial companies. An objective assessment of the solvency of economic entities by independent experts is in modern business practice an essential element of running a business and government controlled like regular audits.

A credit rating is often used by banks and other financial intermediaries to make lending decisions, money market transactions, insurance, leasing, and in any other situation where an assessment of a business partner's creditworthiness is required. Many companies choose not to disclose their financial information in the process business negotiations. In this case, the issuer's credit rating serves as a reliable benchmark of creditworthiness.

Credit rating is one of the most important tools for increasing the attractiveness of borrowers in the eyes of lenders, allowing them to receive an objective and understandable indicator financial condition borrowers. The independence of the rating agency from financial market participants contributes to increasing confidence in the borrower.

A credit score facilitates the underwriting process. Investment banks and other financial intermediaries operating in the bond market may use a credit rating when planning and placing bond issues.

Principles for the provision of rating services

Independence: A credit rating is an independent opinion of a rating company on the issuer's creditworthiness. The independence of Standard & Poor’s opinion from the interests of any market participants, state and commercial organizations- one of the most important guarantees of objectivity and impartiality of credit ratings. Along with the high quality of analytics, independence determines the accuracy of Standard & Poor's credit ratings.

Publicity of analytical criteria: a key practice that gives investors a complete understanding of Standard & Poor's analytical approaches to risk assessment. All Standard & Poor's criteria are available in various languages, including Russian, and are posted on the Standard & Poor's website.

Collegiality: a decision-making procedure that eliminates any possibility of manipulating the opinion of analysts responsible for the analysis of a particular issuer. The rating committee is the most important mechanism in the process of assigning a credit rating, which guarantees the impartiality of analysts' assessments, quality control and the futility of pressure on the opinion of analysts from outside. The rating committee is formed from specialized specialists, depending on the industry and other characteristics 5-9 of the issuer. The task of the rating committee includes a detailed discussion of the rating report for this issuer and the assignment of a rating at a certain level by voting.

Interactivity: the principle on the basis of which interaction with the issuer is built in the process of assigning a credit rating and subsequent monitoring of it. Based primarily on information received from the issuer itself, painstaking, detailed discussion of all possible situations that could affect its creditworthiness. Interactivity implies regular meetings with the issuer's management and constant informational contact, which makes it possible to promptly respond to ongoing changes.

Information privacy: a fundamental condition of work that allows the issuer to guarantee non-disclosure of confidential information transferred to analysts and disclosure of the rating only with the consent of the issuer.

Use of rating scales: the scale makes it possible to compare issuers of different economic nature (corporations, regions, municipalities, banks, insurance companies, etc.) in terms of the amount of credit risk, and takes the issuer and its obligations beyond the limits of a narrow industry context.

Ongoing research into default probability: are carried out on the basis of a wide statistical sample for all rating categories to control the quality of the rating opinion and (if necessary) adjust the methodology.

Rating agencies

Moody's Interfax Rating Agency

Moody's Interfax Rating Agency is a universal rating agency that provides a full range of rating services for all sectors of the economy.

Aaa.ru- issuers, or debt obligations with a rating of Aaa.ru, are characterized by the highest creditworthiness in relation to other issuers in the country.

Aa.ru- issuers, or debt obligations with a rating of Aa.ru, are characterized by very high creditworthiness in relation to other issuers in the country.

A.ru- issuers, or debt obligations rated A.ru, have above average creditworthiness among other issuers in the country.

Baa.ru- issuers, or debt obligations with a rating of Baa.ru, represent the average level of creditworthiness among issuers in the country.

Ba.ru- issuers, or debt obligations rated Ba.ru, have a creditworthiness level below the average for issuers in the country.

b.ru- issuers or debt obligations rated B.ru have low creditworthiness relative to other issuers in the country.

Caa.ru- issuers, or debt obligations with a rating of Caa.ru, are characterized as speculative and have a very low creditworthiness relative to other issuers in the country.

Ca.ru- issuers, or debt obligations with a rating of Ca.ru, are characterized as highly speculative and have extremely low creditworthiness relative to other issuers in the country.

c.ru- issuers, or bonds rated C.ru, are characterized as highly speculative and have the lowest creditworthiness relative to other issuers in the country.

Moody's Interfax Rating Agency supplements the ratings of each category from aa before Caa indexes 1, 2 and 3. Index 1 indicates that the obligation has a higher rank in its rating category; index 2 indicates an average rank, and index 3 indicates a lower rank in that category.

Standard & Poor's

Issuer's credit rating according to the international scale Standard & Poor's expresses the current opinion on the general creditworthiness of the debt issuer, guarantor or guarantor, business partner, its ability and intention to fulfill its debt obligations in a timely manner and in full.

The credit rating of debt obligations according to the international scale Standard & Poor's expresses the current opinion on the credit risk for specific debt obligations (bonds, bank loans, loans, other financial instruments).

The values ​​of credit ratings on the international scale Standard & Poor's include a long-term rating that assesses the ability of the issuer to fulfill its debt obligations in a timely manner. Long-term ratings range from the highest category- "AAA" to the lowest - "D". Ratings ranging from "AA" to "CCC" may be supplemented with a plus (+) or minus (-) sign indicating intermediate rating categories in relation to the main categories.

A short-term rating is an assessment of the likelihood of timely repayment of obligations that are considered short-term in the respective markets. Short-term ratings also range from 'A-1' for the highest quality obligations to 'D' for the lowest quality obligations. Ratings within the 'A-1' category may contain a plus sign (+) to highlight stronger commitments in that category.

Apart from long-term ratings, Standard & Poor's has special ratings for preferred stocks, money market funds, mutual bond funds, the solvency of insurance companies and companies working with derivatives.

AAA- a very high ability to timely and fully meet their debt obligations; the highest rating.

AA— high ability to timely and fully meet their debt obligations.

A— Moderately high ability to meet their debt obligations on time and in full, but more sensitive to the impact of adverse changes in commercial, financial and economic conditions.

BBB— Adequate ability to meet its debt obligations on time and in full, but greater sensitivity to the impact of adverse changes in commercial, financial and economic conditions.

BB- out of danger in the short term, but more sensitive to the impact of adverse changes in commercial, financial and economic conditions.

B— higher vulnerability in the presence of unfavorable commercial, financial and economic conditions, but at present it is possible to fulfill debt obligations on time and in full.

CCC— at the moment there is a potential possibility of default by the issuer of its debt obligations; the timely fulfillment of debt obligations is largely dependent on favorable commercial, financial and economic conditions.

CC— at present, there is a high probability of default by the issuer of its debt obligations.

C— bankruptcy proceedings have been initiated against the issuer or similar action has been taken, but payments or performance of debt obligations continue.

SD- selective default on this debt obligation while continuing timely and full payments on other debt obligations.

D— default on debt obligations.

Stable - unlikely to change.

Developing - possible increase or decrease in the rating.

You can also determine the issuer's credit rating on the Russian Standard & Poor's scale. Russian issuers mean all issuers of debt obligations, guarantors and guarantors, insurance companies located in the Russian Federation or operating in Russian financial markets. The business partner rating is a type of credit rating issuer.

An issuer's credit rating is not equivalent to the rating of its specific debt obligations, since it does not take into account the nature and security of a particular obligation, as well as its relative status in the event of bankruptcy or liquidation of the issuer and the protection of creditors' rights thereon. The creditworthiness of the guarantors, or guarantors, for specific obligations of the issuer, as well as other forms of credit risk mitigation, may provide the basis for an upgrade in the credit rating of the obligation relative to the issuer's credit rating.

An issuer's credit rating is not a recommendation as to whether to sell or buy an issuer's debt, nor is it an opinion on the market price of debt or investment attractiveness issuer for a particular investor. The credit rating is based on current information obtained from the issuer or from other sources that Standard & Poor's considers reliable. Standard & Poor's does not audit in connection with any credit rating and may occasionally rely on unaudited financial information. An issuer's credit rating may be changed, suspended or withdrawn as a result of any change in or lack of information or for other reasons.

Issuer credit rating:

ruAAA. The issuer's rating of 'ruAAA' means the issuer's very high ability to timely and fully meet its debt obligations relative to other Russian issuers. This is the highest credit rating on the Russian Standard & Poor's scale.

ruA. An issuer rated 'ruA' is more exposed to adverse changes in commercial, financial and economic conditions than issuers rated 'ruAAA' and 'ruAA'. Nevertheless, the issuer is characterized by a moderately high ability to timely and fully meet its debt obligations relative to other Russian issuers.

ruBBB. The 'ruBBB' issuer rating reflects the issuer's sufficient ability to timely and fully meet its debt obligations relative to other Russian issuers. However, this issuer is more sensitive to adverse changes in commercial, financial and economic conditions than higher-rated issuers.

ruBB, ruB, ruCCC, ruCC. Issuers rated 'ruBB', 'ruB', 'ruCCC' and 'ruCC' on the Russian scale by Standard & Poor's are characterized by high credit risk relative to other Russian issuers. Despite the fact that such issuers have some degree of reliability, they are more degrees are subject to uncertainty and influence adverse factors compared to other Russian issuers.

ruBB. An issuer rated 'ruBB' has less credit risk than Russian issuers with lower ratings. However, uncertainty or the impact of adverse changes in commercial, financial and economic conditions may result in an issuer's inability to meet its debt obligations in a timely manner and in full.

ruB. The 'ruB' issuer rating reflects a lower credit profile than the 'ruBB' rating. Currently, this issuer is able to fulfill its debt obligations on time and in full. However, unfavorable changes in commercial, financial and economic conditions are likely to prevent the issuer from meeting its debt obligations on time and in full.

ruCCC. The issuer's rating of 'ruCCC' means that at the moment, in the conditions of the Russian financial market, there is a potential possibility of default on its debt obligations. The timely fulfillment of debt obligations is largely dependent on favorable commercial, financial and economic conditions.

ruC. The ruC issuer rating is assigned when the issuer is subject to bankruptcy proceedings, a ban on its core business, a court decision is expected to impose a penalty on property, or in another similar case. During a trial (or external management) the relevant authority may decide to pay off part of the debt obligations and default on the remaining obligations. Standard & Poor's description of the credit rating of debt obligations provides a more detailed explanation of the possible impact of such decisions on the credit rating of specific debt obligations.

Rating «RUSD» in the conditions of the Russian financial market, it is assigned when Standard & Poor's believes that the issuer has defaulted on a particular issue or several issues of its debt obligations, but will continue to make timely and full payments on other debt obligations. In the description of the credit rating of Standard & Poor's debt obligations "s provides a more detailed explanation of the possible impact of such decisions on the credit rating of specific debt obligations.

Standard & Poor's specialized ratings are assigned to certain types of debt obligations, bank loans, investment projects and private placements, using the same scale as for other debt instruments. Private placement ratings include an assessment of the guarantees and collateral required to mitigate the risk of loss in the event of a default. Bank loan ratings serve the needs of the syndicated loan and project finance markets and include an assessment of the prospects for a lender to receive funds in the event of default, which is based on an analysis of the value of collateral or other protection mechanisms usually provided in such schemes.

Bank loans, private placements, and other financial instruments such as guaranteed bonds, when well-protected and able to adequately compensate the lender, may be rated higher than the issuer itself. In contrast, instruments that are inferior in priority to repayment of the issuer's principal debt are usually rated lower than the issuer's rating.

Many mutual fund managers use Standard & Poor's ratings assigned to managed funds to highlight the advantages of their bond and cash funds against competitors' funds. Ratings provide investors with information about the creditworthiness of funds and the level of quality of their management.

• the quality of the assets that are being securitized;
• payment structures;
• legal purity of transactions.

The use of structured instruments makes it possible to reduce credit risks by transferring securitized assets off the issuer's balance sheet.

The priority of tranches in the issuance of structured instruments allows the issuance of obligations with a credit quality higher than the credit quality of securitized assets.

Indicators of the state of the stock markets are the Standard & Poor’s indices, which are used by investors around the world to assess the effectiveness of investments, as well as as a basis for a wide range of financial instruments such as index funds, deposit products, futures, options, and exchange-traded funds (ETFs). The S&P 500 index includes 500 leading companies in the leading sectors of the American economy and covers more than 80% of the shares of American companies. The S&P Global 1200 index covers approximately 70% of the world's capital markets, includes seven of the most common indices, many of which are leaders in their regions. Standard & Poor's indexes are created as investment portfolio indices that are representative of the market in a broad sense and at the same time have practical significance for investors.

Fitch Ratings

Ratings Fitch Ratings are opinions about the ability of issuers to meet their financial obligations on time or about the timely repayment of an issue of securities, including obligations such as interest payments, dividends on preferred shares or payments of principal. Ratings can be assigned to a wide range of issuers and securities, including states, governments, structured finance instruments and corporate issuers; debt obligations, preferred shares, bank loans and counterparties. Ratings can also assess the financial strength of insurance companies and financial guarantors.

Credit ratings are used by investors as indicators of the likelihood that payments will be made in accordance with the terms on which the investment was made. Thus, the use of credit ratings determines their function: investment grade ratings (international long-term "AAA" - "BBB"; short-term "F1" - "F3") indicate a relatively low probability of default, while ratings of speculative, or non-investment, ( sub-investment) category (international long-term "BB" - "D"; short-term "B" - "D") may indicate a higher probability of default or that a default has already occurred.

The ratings do not provide a definite forecast of the probability of default, but it should be noted that over a long period of time, the default rate on US corporate bonds rated 'AAA' has averaged less than 0.10% per annum, while the default rate on bonds rated "BBB" reached 0.35%, and bonds rated "B" - 3.0%.

Issuers or issues of securities that are rated at the same level have similar, but not necessarily identical, creditworthiness because the rating categories do not fully reflect small differences in credit risk.

Credit ratings and research by Fitch Ratings are not recommendations to buy, sell or hold any security. The ratings do not constitute a commentary on the adequacy of the market price, the suitability of a particular security for particular investors, or the application of tax exemptions or tax treatment to any payments on any securities.

The ratings are based on information obtained directly from issuers, other obligors, underwriters, their experts and other sources that Fitch considers reliable. Fitch does not audit or verify the correctness or accuracy of such information. Ratings may be changed or withdrawn as a result of changes or unavailability of information, as well as for other reasons.

The ratings assigned to securities issuance programs relate only to the standard issues within the particular program. These ratings do not apply to all releases within the program. In particular, in the case of non-standard issues, i.e. those associated with third party credits or index performance, their ratings may differ from the rating of the corresponding program.

Credit ratings do not directly assess any risks other than credit risks. In particular, these ratings do not address the risks of loss due to changes in interest rates or other market factors.

Individual ratings assigned only to banks. The purpose of these internationally comparable ratings is to evaluate the bank if it were completely independent and could not rely on external support. These ratings measure a bank's exposure to risk, risk appetite and risk management and thus represent the agency's view of the likelihood of significant difficulties such that the bank will require support.

The main factors that the agency analyzes when evaluating a bank and determining the level of this rating include profitability and balance sheet integrity (including capitalization), client base and management, operating environment and development prospects. Finally, an important factor is the consistency of policy and the size of the bank (volume own funds) and diversification (scale of activity in various sectors of the economy and geographical coverage).

An exceptionally stable bank. The characteristics of such a bank may include exceptionally high profitability and balance sheet integrity, a very large customer base, and high quality management, exceptionally favorable operating environment and development prospects.

A stable bank with no significant concerns. Among the characteristics of such a bank may be high profitability and integrity of the balance sheet, a large client base and high quality management, favorable operating environment and development prospects.

A bank with adequate soundness that also has one or more concerns. There may be concerns about the profitability and integrity of such a bank's balance sheet, the size of its customer base and the quality of its management, operating environment or development prospects.

A bank that is characterized by certain shortcomings, both internal and related to external factors. There are concerns about its profitability and balance sheet integrity, customer base and management quality, operating environment or development prospects. Banks operating in emerging economies inevitably face a greater number of potential externalities-related shortcomings.

A bank that is experiencing very serious difficulties and that already needs or is likely to need external support.