Russian bonds now investment grade
Baa3, that is. Here is the Financial Times story.
Russia’s debt to gdp ratio is 28 percent, Japan’s is 140 percent, but obviously Japan has more accumulated trust.
How much do these ratings make sense?
On May 31 the U.S. credit-rating agency Moody’s Investors Service lowered by two notches Japan’s credit rating on yen-denominated bonds issued by the government. Japan’s previous credit rating was Aa3, the fourth highest grade and already the lowest among developed nations. This was downgraded to A2, placing Japan below such nations as Chile and Botswana and on par with Israel, Poland, and the Republic of South Africa. As a reason for the downgrade, Moody’s stated, “There exists nothing within present financial policy that can put the brakes on the worsening debt situation.” The outlook for the credit rating is “stable,” so the series of downgrades appears to have ended for the time being. In addition, Japan’s government bonds issued overseas maintained their Aa1 rating with a “stable” outlook. Moody’s had announced in February that it was considering downgrading Japanese bonds and continued considering the matter based on the state of the Japanese economy and government finances.
Here is the link for the Japanese comparison. You might note that Botswana, although it received a higher rating than Japan, has Japan as its largest creditor.