S&P report: Russia's future shadowed by old conflicts after 10 years of gains

/Standard & Poor's, Moscow, 15.09.08/ - Over the past 10 years, the sovereign credit rating on Russia has developed from an esoteric attribute of debt issuance into a pragmatic instrument for measuring credit risk, and taken on an important role in the investment decision-making process. The country's evolution since its sovereign debt default a decade ago is outlined in an article titled "After 10 Years Of Gains, Old Conflicts Return To Cast A Shadow On Russia's Future". This article is part of a special Standard & Poor's report, "Ten Years After Default, New Risks Emerge For A Resurgent Russia," which will feature in the Sept. 17, 2008, issue of CreditWeek, our weekly magazine on credit risk. "An easing debt burden, growing foreign exchange reserves, and a consistent, moderately conservative fiscal and monetary policy, which occurred against the backdrop of a favorable oil market environment, were key factors behind the steady upgrade of Russia's credit rating," notes Alexei Novikov, head of the Standard & Poor's Moscow office and author of the report. "Consumerism and a strong desire for a better quality of life are becoming a powerful and very visible economic and political factor in Russia. However, old and new geopolitical challenges seem to be diverting the country's attention and resources from a reform agenda, and how Russia responds to this question will go a long way in determining its fortunes over the next 10 years and beyond". Since 1998, the sovereign rating on Russia has taken 11 steps up the rating scale and crossed the important divide between speculative and investment- grade categories, where it remains today. In the meantime, more than two hundred Russian/CIS (Commonwealth of Independent States) issuers, apart from the sovereign, have Standard & Poor's credit ratings. This represents the highest degree of coverage among all emerging markets, including China, India, and Latin American countries. The following articles, also part of the special report on Russia, are available on RatingsDirect, the real-time Web-based source for Standard & Poor's credit ratings, research, and risk analysis. - A Decade After The Crisis, Russia's Banks Are Healthier, But Still Susceptible To Shock - Helping To Fill Russia's Infrastructure Gap: The Role Of Public Private Partnerships - Restructured Russian Electricity Distributors Face Increased Debt And A New Regulatory Regime - Research Update: Russia Ratings Remain On Positive Outlook As Fiscal And External Reserves Keep Growing - Russia Sitting Comfortably On Its Liquidity Cushion, Despite Some Loose Threads - Significant Investment Needs And Tight Liquidity May Dim Russian Food Retailers' Bright Future For more information: Alexei Novikov, Moscow (7) 495-783-4012; alexei_novikov@standardandpoors.com [2008-09-15]