Moody's rates Bank of Moscow notes Baa1

Moody's Investors Service said it assigned a Baa1 rating to the forthcoming issue of loan participation notes to be issued by Kuznetski Capital SA for the sole purpose of funding a loan to Russia-based Bank of Moscow. The amount and the tenor of the issue will be determined by market conditions. The outlook is stable.

The ratings take into account the potential support the bank may receive from the City of Moscow, the likelihood that Russia's central government may extend support to the bank and the bank's fundamental credit quality, the agency said.

Moody's said the ratings also reflect the probability of a sovereign default implied by the Russian government's low investment-grade Baa2 foreign-currency bond rating and the likelihood that the Russian government could impose a debt moratorium in the event of default on its own foreign currency obligations.

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