- Russia Seeks to Loosen Rating Companies’ Grip (Bloomberg, July 13, 2011):
Russia and members of the Eurasian Economic Community, a grouping of former Soviet republics, are seeking to loosen the dominance of U.S. credit-rating companies and may set up an independent rival next year.
Prime Minister Vladimir Putin has said he’s an “ardent supporter” of the plan because Russia’s debt grade is an “outrage” that lifts corporate borrowing costs and increases risks. The nation’s sovereign credit rating was last raised by New York-based Moody’s Investors Service in 2008 to Baa1, the third-lowest investment grade, one step above Brazil and four below China.
“It’s madness to trust American rating agencies,” Sergei Glazyev, the group’s deputy general secretary, said in an interview in Moscow yesterday. “The market is objectively interested in new reference points.”
Russia is championing a new ratings company after Poland said last week it may use its six-month term holding the rotating presidency of the European Union to campaign for an independent European credit evaluator. Dagong Global Credit Rating Co., the first domestic rating company set up in China, began issuing sovereign ratings a year ago.
Russia is rated A by Dagong, one level below the U.S. Moody’s ranks Russia seven steps lower and Standard & Poor’s and Fitch Ratings eight levels below the United States’ AAA grade, their highest.