Moody's cuts Oblast of Moscow

Moody's Investors Service said it has downgraded the foreign and local currency ratings of the Oblast of Moscow to B3 from B1.

The rating action reflects the Oblast's weakening stand-alone capacity to manage its tight debt repayment schedule going forward, the agency said.

Tightened market conditions with a dramatically increasing cost of funding and overall restricted access to financial markets could cause further hardships to the region's debt service capacity, Moody's noted, adding that the ratings remain on review for possible downgrade.

"Going forward, the region's capacity to generate additional budget revenue for debt service will be constrained by the current downturn in the local and national economies, leading to a shortfall in tax proceeds," explains Alexander Proklov, a Moscow-based Moody's vice president-senior analyst and lead analyst for this issuer.

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