Moody’s, the international rating agency, stated that it will not declare a default for states that issue bonds purchased by the Russian Federation if Russian assets abroad are seized. Reuters reported this stance. The comment signals a clear separation between country-level ratings and bondholder-specific outcomes, emphasizing that sovereign-grade risk assessments do not normally hinge on individual creditor actions. In explaining the position, Thorsten Nestmann, senior vice president at Moody’s Investors Service, noted that the agency’s ratings are designed to reflect broad sovereign credit risk rather than the particular interests of any single bondholder. As a result, default is unlikely to be considered a scenario for the countries holding those bonds. (Reuters)
Following this, S&P Global’s EMEA country rating sector head, Frank Gill, added that even if Russian assets were seized, a default would not automatically follow. He argued that coupon payments were routed through a payment agency that distributes funds to other creditors, thereby sustaining the flow of payments even in adverse circumstances. This distinction underscores how different rating agencies interpret the mechanics of debt service and the overall credit health of a nation. (Reuters)
Earlier reports noted Moody’s had downgraded the outlook for China’s government bonds to negative, reflecting concerns about the country’s fiscal and economic trajectory. This signal from Moody’s adds another layer to the global rating narrative around sovereign debt and the potential spillover effects of asset seizures or policy shifts. (Reuters)
In related commentary, Mishustin urged realism and cautioned against excessive optimism about the immediate credit outlook, reminding markets to balance expectations with ongoing geopolitical and economic developments. This reminder aligns with a broader pattern in sovereign risk assessment where analysts stress prudent risk management and evidence-based projections. (Reuters)