Moody's rates Rostov Aa2.ru

Moody's Interfax Rating Agency said it assigned a national scale rating of Aa2.ru to the Russian Oblast of Rostov.

The agency said the rating reflects the oblast's baseline credit assessment of 12 (on a scale of 1 to 21, where 1 represents the lowest credit risk); the Baa2 local-currency rating of the Government of Russian Federation; a 70% degree of default dependence and a 20% likelihood that the federal government would act to prevent a default by the Oblast.

The baseline credit assessment of 12 reflects Rostov's comparatively good budgetary performance based on strong economic growth in recent years, low debt and the expected stabilization of the budgetary framework in Russia, Moody's said.

The rating also takes into account the considerable challenges facing the region, including its dependence on federal equalization transfers and spending pressures due to a rise in public-sector wages and social benefits, the agency said.

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