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New York - Moody's on Friday lowered Russia's government bond rating to one level above junk.
Moody's lowered Russian bonds from a rating of Baa2 to a Baa3, meaning the bonds are viewed as speculative, which most investors seek to avoid. The agency also threatened to lower Russia's rating further.
Moody's based its decision on the crash in oil prices and the shift in the foreign exchange markets further damaging the already below average medium-term growth perspective. The country is rated at BBB by the two other large ratings agencies.
Moody's downgraded Russia from Baa1 to Baa2 in October. It said further steep falls in oil prices and the exchange rate along with Russian borrowers' highly restricted international market access due to ongoing sanctions are increasing financial stresses.
In its updated growth outlook for Russia, Moody's now expects GDP to shrink around 5.5% in 2015 and 3% in 2016, bringing real growth over the 10 years through 2018 to virtually zero, Moody's said.
Another ratings agency, Fitch Ratings, on Friday revised the outlook on Greece's long-term foreign and local currency issuer default ratings to negative from stable, citing political uncertainty.
The issue ratings on Greece's senior unsecured foreign and local currency bonds have been affirmed at "B", meaning high credit risk. The short-term foreign currency issuer default rating also has been affirmed at "B".
The move comes just over a week ahead of Greek parliamentary elections. Fitch said early elections to be held on 25 January have made the direction of Greek policymaking more uncertain.
"Prolonged political deadlock until the summer is not Fitch's expectation, but would increase the risk of financing difficulties and a return to recession," Fitch said in a news release.
