National acre rating scale. Russian rating agencies
The Analytical Credit Rating Agency (ACRA) has disclosed the methodology for assigning credit ratings to non-financial organizations and corporate bonds on the national scale. From 2017, only ratings on the national scale from the agencies included in the Central Bank register will be used for regulatory purposes. And the only such agency so far is ACRA. However, business is in no hurry to queue up for ratings, preferring to wait until the very end - work on bylaws regulating the use of ratings has just begun.
Yesterday, the Analytical Credit Rating Agency (ACRA) presented its methodology for assigning ratings not financial companies and corporate bonds. The day before, according to Reuters, the first deputy chairman of the Central Bank Sergei Shvetsov, speaking at the Federation Council, confirmed the regulator's decision to abandon the use of ratings of foreign agencies and agencies that had not passed the accreditation with the Bank of Russia in due time. The transition period ends on January 13, 2017 in relation to credit ratings assigned by Russian agencies, and on July 13, 2017, in relation to credit ratings assigned by foreign agencies.
Currently, the only accredited agency is ACRA. The agency will rate Russian companies and enterprises so far only on the national scale. According to Anton Shishov, ACRA Managing Director for Methodology, the national scale provides exclusively in-country comparison of credit ratings. "At the same time, the highest rating on this scale is not a certain minimum credit risk or the minimum probability of default, this is the best credit quality within a particular state, "he explained. The national scale of ACRA contains 19 pre-default categories - an unusually large number for Russian issuers accustomed to less detailed international scales. The letter designation of levels, on the contrary, corresponds to generally accepted practice - from AAA to D.
According to Ekaterina Trofimova, ACRA Director General, the financial authorities are starting to work on amendments to the bylaws governing the use of ratings for regulatory purposes (when included in the Central Bank's Lombard List, the company receives state funding, etc.). The Central Bank, the Ministry of Finance and the Federal Treasury will have to amend the documents. In total, according to Ms. Trofimova, there are about 70 such by-laws. In addition to the need to obtain ratings on the national scale (so far only from ACRA), businesses will also have to revise their internal corporate regulations linked to credit ratings.
However, judging by the questions of the representatives of the largest issuers and banks who were present at the presentation, business has not yet fully realized the "scale of the disaster". Many wondered if there would be current situation used by the authorities in order to further restrict business access to state resources - to rewrite the Lombard list, the lists of the Ministry of Finance, etc. That is why the strategy of "wait until the last" prevails in the market until the rules of the game are finally clear. Ms. Trofimova does not exclude such a development of events, however, according to her, there is no public information on this matter. “I admit that admission to the first level listing may change. There are a number of companies and instruments that raise big questions, although they are contained in solid lists,” she said.
According to the top manager of one of the large banks, which has ratings from foreign rating agencies, solving the problem requires not only time, but also serious expenses. "While the transition period is in effect, we will have to maintain all the existing ratings plus the rating on the national scale, which is also not cheap," says the source of Kommersant. However, according to Ms. Trofimova, as soon as the transition to the new rating system takes place, costs will decrease. The only problem is to get the national scale rating on time. "We will not allow any connivance from the point of view of processes. If they come to us in 2017, they risk getting into the queue for 2018. Whatever respected company comes to us, it will stand behind some state farms until it comes up her turn, "she said. Currently, the Central Bank is considering documents from two more rating agencies - Expert RA and NRA. If at least one more of them receives accreditation from the Central Bank, the situation for the companies will not be so acute.
ACRA's rating model is based on a mixed assessment - 50% of factors will be assessed by experts, for 50% it will be used as factual information from financial statements and predictive. For both assessments, data will be used over a three-year perspective: in the case of actual results - the opposite, and in the case of forecasts - in the forward. In total, the model includes 11 factors, assessed by 24 indicators. The structure of the rating analysis consists of an analysis of industry, operational and financial risk profiles. ACRA considers the market position and level of corporate governance to be the most important indicators of the operational risk profile. In terms of the financial risk profile, the main role is given to liquidity and the company's ability to generate cash flows.
ACRA notes that the Russian corporate debt market is distinguished by a high share of secured debt and low recovery of creditors' funds in case of defaults. The lack of collateral causes possible differences between the level of compensation for investors in bonds and the level of compensation for losses of other creditors. These differences are factored into the rating of bonds of issuers with relatively low rating levels, which have a higher probability of default. The methodology takes into account the differences in the level of compensation for losses for different categories of creditors. If there is secured debt, the credit rating is assigned at the level of the issuer's rating or increased by one notch. There are two schemes for unsecured liabilities: either assigning a rating at the level of "issuer rating minus two notches" depending on the level of the issuer's debt burden and the amount of secured debt, or adjusting by three steps depending on the assessment of funds available for transfer to creditors in the event of default.
The ACRA rating agency has bought the only ERA agency in Slovakia, which holds less than 1% of the European rating market. The purchase will allow ACRA to use the international rating scale without investing in its creation
Ekaterina Trofimova (Photo: Sergey Savostyanov / TASS)
Analytical Credit Rating Agency (ACRA) has acquired the Slovak rating agency European Rating Agency (ERA), told reporters general director ACRA Ekaterina Trofimova. The amount of the deal was not disclosed. According to her, the purchase of an agency with a European license was needed by ACRA, one of the two national agencies accredited with the Central Bank, to implement plans to launch an international rating scale.
Admission ticket
ACRA plans to take the necessary steps to include ERA ratings in the regulatory requirements of Russia in the status of an international rating agency. According to the legislative requirements of 2015, national credit ratings in Russia can be assigned only by agencies that have received the Central Bank accreditation and operate in Russia as independent legal entities. But now the ratings of the big three agencies - Moody "s, S&P Ratings and Fitch Rating, as well as the Chinese and Canadian rating agencies, are used for regulatory purposes for rating objects outside Russia. ACRA expects that the ERA ratings will also be be recognized on the territory of Russia.
According to 222-FZ "On the activities of credit rating agencies Russian Federation»For regulatory purposes in Russia, only the national rating scale is used (the law was adopted as part of the reform of the rating industry in Russia, caused by dissatisfaction with the actions of global agencies against the backdrop of Western sanctions). But as the reform took place, it became obvious that for some categories of issuers, even if they operate in Russia, an international rating scale is required, Ekaterina Trofimova, CEO of ACRA, commented on the deal. “We could create an international scale at our own ACRA, but it would fall under the regulation of the Central Bank, and the agency would then bear all the regulatory burdens (validation, methodology protection, testing), and this is a huge complex of works and heavy expenses- she added. “Therefore, it was strategically more profitable to buy a European agency”. Ratings on the international scale directly from ACRA could only be applied in Russia, which, given the small potential demand for such a product, would not justify investment in the international scale in Russia.
ACRA will continue to deal only with the national scale, ERA - with the international scale, the agencies will work autonomously. At the same time, when determining the rating on the national scale, ACRA will use the ERA ratings, the Russian agency explained.
Very small agency
According to ACRA estimates, ERA currently occupies less than 1% of the market of rating agencies in Europe, where the big three dominate. ERA is the only agency in Slovakia and currently has two public ratings. ERA specializes in ratings local authorities authorities. ACRA intends to develop ERA's activities in Eastern Europe in the field of sub-sovereign, sovereign and sub-national ratings, negotiations with potential rated issuers are already underway, the agency added. ACRA's investments in ERA within one and a half to two years will amount to approximately € 100-150 thousand. These are operating expenses, expenses for changing premises, hiring personnel, etc.
“The growth zones in the medium term in the classic rating business in Russia are very limited, and we need targeted international development to increase the volume of our business,” commented Ekaterina Trofimova. - There are still vacant niches in the overloaded European rating market, especially now in the European Union a lot of emphasis is placed on reducing the dependence of issuers on the Big Three and on working with small agencies, and for us this is a growth zone. With our resources, we can take a prominent position in the European market. "
According to the managing director of the National Rating Agency Pavel Samiev, there are about ten rating agencies in Europe. This is the most concentrated market with high competition, and ACRA's Russian resources or methodologies are not an advantage in it. “This deal will not open up great scope for business for ACRA, but it will give it the status of an international agency and the ability to use an international rating scale,” he says. "ERA is licensed by the European Securities and Markets Authority (ESMA), which is not politicized, so the transition of this company to a Russian investor should not affect its development."
Expert RA (the second Russian rating agency accredited by the Central Bank with ACRA) said that they did not plan to enter the European market yet. “From a commercial point of view, the priority for us is the domestic market, as well as the markets of the CIS countries, for which we are preparing a number of rating products, which in the long term and after the approval of the Central Bank will be able to help CIS issuers enter the Russian debt market,” said the CEO of Expert RA ”Sergey Tishchenko.
Analytical Credit Rating Agency (ACRA) was established on November 20, 2015. 27 largest Russian companies and financial institutions with 3.7% shares become ACRA shareholders authorized capital, the total volume of which amounted to over 3 billion rubles. The agency is built in accordance with the latest regulatory requirements and sees its main task as ensuring Russian market high-quality rating product.
Rating values collapse all expand all
Rating rating history
AAA (RU) Rated Entity Issue valuable papers or a financial liability rated AAA (RU) has the highest level of creditworthiness. The highest level of creditworthiness on the national scale for the Russian Federation, according to the Agency. Credit rating financial commitments Government of the Russian Federation. AA + (RU) High level of creditworthiness compared to other rated entities, securities or financial liabilities in the Russian Federation. According to ACRA, it is slightly lower than that of the rated individuals with the AAA (RU) credit rating. AA (RU) High level of creditworthiness compared to other rated entities, securities or financial liabilities in the Russian Federation. According to ACRA, it is slightly lower than that of the rated individuals with the AAA (RU) credit rating. AA- (RU) High level of creditworthiness compared to other rated entities, securities or financial liabilities in the Russian Federation. According to ACRA, it is slightly lower than that of the rated individuals with the AAA (RU) credit rating. A + (RU) Moderately high level of creditworthiness compared to other rated entities, securities or financial liabilities in the Russian Federation, however, there is some sensitivity to the impact of adverse changes in the commercial, financial and economic conditions in the Russian Federation. A (RU) Moderately high level of creditworthiness compared to other rated entities, securities or financial liabilities in the Russian Federation, however, there is some sensitivity to the impact of adverse changes in the commercial, financial and economic conditions in the Russian Federation. A- (RU) Moderately high level of creditworthiness compared to other rated entities, securities or financial liabilities in the Russian Federation, however, there is some sensitivity to the impact of adverse changes in the commercial, financial and economic conditions in the Russian Federation. BBB + (RU) Moderate credit profile compared to other rated entities, securities or financial liabilities in the Russian Federation, with a higher sensitivity to the impact of adverse changes in the commercial, financial and economic environment in the Russian Federation. BBB (RU) Moderate creditworthiness compared to other rated entities, securities or financial liabilities in the Russian Federation, with a higher sensitivity to the impact of adverse changes in the commercial, financial and economic environment in the Russian Federation. BBB- (RU) Moderate creditworthiness compared to other rated entities, securities or financial liabilities in the Russian Federation, with a higher sensitivity to the impact of adverse changes in the commercial, financial and economic environment in the Russian Federation. BB + (RU) Moderate low level creditworthiness compared to other rated entities, securities issues or financial liabilities in the Russian Federation. The creditworthiness is stable in the short term, but there is a high sensitivity to the impact of adverse changes in the commercial, financial and economic conditions in the Russian Federation. BB (RU) Moderately low creditworthiness compared to other rated entities, securities or financial liabilities in the Russian Federation. The creditworthiness is stable in the short term, but there is a high sensitivity to the impact of adverse changes in the commercial, financial and economic conditions in the Russian Federation. BB- (RU) Moderately low creditworthiness compared to other rated entities, securities or financial liabilities in the Russian Federation. The creditworthiness is stable in the short term, but there is a high sensitivity to the impact of adverse changes in the commercial, financial and economic conditions in the Russian Federation. B + (RU) Low level of creditworthiness compared to other rated entities, securities or financial liabilities in the Russian Federation. Currently, it is possible to fulfill debt obligations on time and in full, but there is a high vulnerability in the presence of unfavorable commercial, financial and economic conditions In Russian federation. B (RU) Low creditworthiness compared to other rated entities, securities or financial liabilities in the Russian Federation. Currently, there is a possibility of meeting debt obligations on time and in full, but there is a high vulnerability in the presence of unfavorable commercial, financial and economic conditions in the Russian Federation. B- (RU) Low level of creditworthiness compared to other rated entities, securities or financial liabilities in the Russian Federation. Currently, there is a possibility of meeting debt obligations on time and in full, but there is a high vulnerability in the presence of unfavorable commercial, financial and economic conditions in the Russian Federation. CCC (RU) Very low creditworthiness compared to other rated entities, securities or financial liabilities in the Russian Federation. There is a potential for a rated entity to default on its debt obligations in the short term. The timely fulfillment of debt obligations is largely dependent on favorable commercial, financial and economic conditions in the Russian Federation. CC (RU) Very low creditworthiness compared to other rated entities, securities or financial liabilities in the Russian Federation. There is an increased likelihood that the rated entity will fail to meet its debt obligations in the short term. Timely fulfillment of debt obligations depends on favorable external financial and economic conditions in the Russian Federation, as well as on interaction with creditors. C (RU) Very low creditworthiness compared to other rated entities, securities or financial liabilities in the Russian Federation. There is a high probability that the rated entity will default on its debt obligations in the short term. Timely fulfillment of debt obligations is highly unlikely without interaction with creditors. RD (RU) The Rated Entity is under the control (significant influence) of the regulator. As a rule, in such cases, the regulator can prioritize the fulfillment of obligations or suspend payments to creditors. SD (RU) A Rated Entity is in default on one of its financial obligations. At the same time, the Agency believes that the rated entity will continue to timely service other financial obligations. D (RU) A Rated Entity is in default on its financial obligations. withdrawn nForecast history ratings
positive Suggests a possible rating upgrade. stable Assumes, with the highest probability, that the rating will remain unchanged. negative Suggests a possible downgrade. developing Assumes both a possible upgrade and a downgrade of the rating. on revision (positive) The agency may change the credit rating in the short term. Rating upgrade is possible. on revision (negative) Agency may change the credit rating in the short term. A downgrade is possible. on revision (developing) Agency may change the credit rating in the short term. Both an increase and a downgrade of the rating are possible.Credit ratings, being the main instrument for assessing the debt market, are used by investors around the world in order to assess the solvency of securities, businesses, cities and even entire countries. An upgrade or downgrade of a rating is a significant signal to investors about how much the risk for certain assets has changed. Based on ratings investment funds form their portfolios, banks determine interest rates on loans for large companies, Insurance companies calculate their reserves.
Credit ratings are formed by special rating agencies... Today in the world there are about 100 different rating agencies, which can be divided into international and national. The most famous and influential international agencies are the Big Three: Standard & Poors, Moody's and Fitch Ratings, which account for over 95% of all debt ratings in the world.
A rating is assigned to an issuer or security on a commercial basis. The customer of the service can be a state, a company, financial institutions... The presence of a rating gives issuers the opportunity to offer their securities to a wider range of investors, reduces interest rates, and also makes the borrower more famous and affects his reputation.
Investors, thanks to the ratings, can get independent assessment the reliability of certain securities, compare them with each other in terms of risk / profitability, as well as promptly receive information about the deterioration or improvement of the condition of issuers, which reflects the change in the rating.
In Russia, credit ratings are used for the following regulatory purposes: Lombard list of the Central Bank, investment pension savings, calculation of insurance reserves of insurance companies, investment of funds military mortgage, placement of funds of state-owned companies, determination of guarantees for loans to enterprises agro-industrial complex, calculation own funds management companies, NPFs, professional participants and insurance companies.
Until 2017, for regulatory purposes, the international scale was mainly used, which was formed by the “big three”. However, after the "sanctions war" of 2014-2015, when all three agencies simultaneously downgraded Russia's rating to speculative, it was decided to abandon this practice in order to reduce dependence on external risks. Since April 2017, S&P, Moody's and Fitch have been represented in Russia as branches, and their ratings can be used by foreign investors.
Since January 1, 2017 in Russia, the activities of credit rating agencies (CRA) are regulated by 222 federal law... According to this law, the national rating scale takes precedence over the international one, and only it is used for regulatory purposes. All organizations that work with public funds are required to obtain a rating on this scale from one of the agencies included in the special register of accredited KRAs compiled by the Central Bank.
As of today, the KRA register includes only two agencies - ACRA and Expert Ra. They assign ratings to constituent entities of the Russian Federation, issuers of securities from the corporate and financial sectors of the economy, as well as bond issues within the framework of structured finance.
"ACRA"- Analytical credit rating agency. It was established on November 20, 2015 after the approval of 222-FZ with the aim of creating a rating agency whose methodology would be trusted by Russian financial institutions. 27 Russian companies and financial institutions with equal shares of 3.7037% of the authorized capital, which amounted to more than 3 billion rubles, became ACRA shareholders. generally. The list of shareholders can be found on the agency's official website.
Expert RA- a rating agency founded in 1997. In December 2016, it was included in the register of credit rating agencies of the Bank of Russia. Expert RA uses 16 methodologies for assigning credit ratings, 11 of which are recognized by the Bank of Russia as fully complying with the requirements of Law 222-FZ and can be used for regulatory purposes. These are methodologies for assigning credit ratings to banks; regional and municipal authorities of the Russian Federation; non-financial companies; holding companies; project companies; leasing companies; microfinance organizations; financial companies; the methodology for assigning credit ratings to debt instruments, as well as the methodology for assigning financial strength ratings to insurance companies and insurers specializing in life insurance. In addition to rating activities, the agency conducts various studies banking, leasing markets, factoring, insurance, MFOs, NPFs, etc.
* Assumes commercial, economic and financial terms
The Expert RA rating agency also sets forecasts for all current credit ratings of banks.
Forecast means the Agency's opinion on a possible change in the rating level in the medium term.
Types of forecasts:
- Positive outlook: there is a high likelihood of a rating upgrade in the medium term
- Negative outlook: there is a high likelihood of a rating downgrade in the medium term
- Stable outlook: the likelihood of maintaining the rating at the same level in the medium term is high
- Evolving forecast: in the medium term, 2 or more options for rating actions are equally probable (maintaining, increasing or decreasing the rating)
In addition to two accredited The central bank agencies and branches of the "Big Three" in Russia there are three more large rating agencies. These are the National Rating Agency (NRA), Rus-Rating and AK&M.
The National Rating Agency has existed since 2002. From January 13, 2017, it stopped assigning credit ratings. Currently, it continues to assign and update non-credit ratings, such as ratings of reliability, quality of services, quality of corporate governance, quality of risk management, attractiveness of employers and others.
The AK&M rating agency has existed since 2005. It traces its history from the rating center of the AK&M information and analytical agency, which has been forming ratings since 1994. Since January 13, 2017, it has continued rating activities not related to the assignment of credit ratings.
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