We’re in, unexpectedly

S&P has just assigned an investment grade to Russian federal (and Moscow City) borrowings:

Russia is the 11th sovereign currently rated by Standard & Poor’s that has made the transition to investment grade from speculative grade.

“The upgrade reflects recent, crucial improvements in the government’s debt level and external liquidity,” said Standard & Poor’s credit analyst Helena Hessel. “These improvements are so significant that they now outweigh the serious and growing political risk that continues to be a key ratings constraint on Russia.”

We’ve been waiting for the investment-level grade for heck knows how long but the upgrade took me by surprise. Why now?

“Nevertheless, the potential for deterioration in the government’s capacity to service its debt is limited in the medium term by its reserves and accumulated funds, which will allow it to cope with even a sharp potential decline in oil prices as far as $20 per barrel, as well as with political and economic policy uncertainties in the near term,” concluded Ms. Hessel.

Well yes but — wait until they squander the Stabilization Fund. There are so many Great Investment Projects waiting to be financed…

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