Fitch Sees ‘Imminent’ Russian Default as It Downgrades Again

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Fitch Ratings cut its credit ratings on Russia further into junk territory and warned that Moscow was likely to default on its debts shortly.

The ratings company slashed its rating on Russia by six notches to a single-C grade, near the bottom of its scale, less than a week after downgrading the country from investment-grade status.

Fitch’s action reflects the rapid collapse in Russia’s creditworthiness since it invaded Ukraine. Russia was judged investment-grade by all three major credit-rating companies as recently as Feb. 26.

“The ‘C’ rating reflects Fitch’s view that a sovereign default is imminent,” Fitch said in a statement late Tuesday, pointing to recent actions by the Kremlin and the Bank of Russia.

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Russia has allowed borrowers to make payments on their overseas debt, but only using rubles even for foreign-currency bonds, while the Russian central bank has effectively blocked coupon payments on onshore debt to foreign bondholders.

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