On Bank of Russia adjustment ratios

To rule out the possibility of any use of bonds which have low credit quality or which bear the evidence of being in resolution, the Bank of Russia made a decision on phased-out cuts in adjustment ratios / increase in discounts for the specified bonds.

Bank of Russia repos and lending operations involving bonds from the Lombard List, whose issuers (issues) have been assigned credit ratings not higher than B- / B3, B / B2 grades according to the classification of S&P Global Ratings, Fitch Ratings / Moody’s Investors Service rating agencies¹, with regard to which amendments will be registered / approved starting 1 April 2017 due to the increase in the bond issue or to extending its maturity, or amending the terms of early redemption of bonds at the request of bondholders in what concerns the change in the date of such early redemption or prohibiting such early redemption, will be conducted on the following conditions:

starting the fourth business day from the date of information disclosure, the adjustment ratio / discount shall be set at 0.4 / 60%;

in three-month time since the date of information disclosure, the adjustment ratio shall equal zero, and such bonds shall not be accepted as collateral for repos.

¹ In July 2016, the Bank of Russia tightened requirements for the minimum rating assigned to the issuer (issue) of corporate bonds to be included in the Bank of Russia Lombard List according to the classification of S&P Global Ratings, Fitch Ratings / Moody’s Investors Service rating agencies and raised the minimum grade from B- / B3 to B+ / B1.

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