On February 27, 2018, the international rating agency Standard & Poor’s raised its long- and short-term foreign currency issuer credit ratings on Vnesheconombank to ‘BBB-/A-3’ from ‘BB+/B’.
At the same time, S&P raised its long- and short term local currency ratings on VEB to ‘BBB/A-2’ from ‘BBB-/A-3’. The outlook is stable.
The upgrade reflects similar rating actions on the Russian Federation. In its press release, S&P indicates VEB’s ‘critical role for Russia as the government’s prime public development institution.’ The VEB Group’s assets currently represent over 4% of Russia’s GDP.
“Upgrade of Vnesheconombank’s ratings following that of Russia’s sovereign credit rating indicates a positive evaluation and appreciation of our operations as a development bank with consistent support from the government. S&P believes that there is a high likelihood of the government’s support in future. Of course, in other circumstances, without sanctions and with us having an access to global capital markets, the effect of obtaining an investment grade rating would be much more noticeable. However, it is an important decision given VEB’s new co-investment paradigm. Undoubtedly, our existing partners will welcome the upgrade. It will also help attract traditionally conservative investors who attach importance to a formal factor - an investment grade rating,” said Nikolay Tsekhomsky, Vnesheconombank’s First Deputy Chairman and Member of the Management Board.