Sovereignstates

Moody’s surprised investors with its upgrade of Russia to Baa3, a decision that looked almost absurd after the arrest of oil baron Mikhail Khordorkovsky. But, as Nick Parsons reports, why the surprise when the country seems willing and able to pay back its debt?

Five years after defaulting on around $35 billion of government domestic debt, Russia made it back to investment grade – in the eyes of one international rating agency at least.

On October 8, Moody’s shocked many investors and analysts with its decision to raise its rating on the sovereign two notches to Baa3. It was the high point of a rollercoaster ride of a year for investors in Russia and for the string of Russian companies that were able to access the Eurobond and loan markets. Optimists