According to Standard and Poor's press service, the agency assigned its BBB+ local currency senior unsecured debt rating to the debut 30-year RUR8 billion T-bond issue, organized by FinMin. The issue matures in 2036 and carries annual coupons of 6.9% (after the first coupon of 6.95%). S&P's says the rating fully reflects sovereign rating of Russian Federation.

The improvement of the country's financial strength is supported by recent high oil prices and successful debt management strategy. The institutional risks will continue to increase before the 2008 presidential elections, but they are not expected to affect the government's ability to pay as the level of debt is low. The Stabilization Fund creates a financial airbag safeguarding the economy in the coming years. Early debt payments to foreign creditors, especially the Paris Club improved the government's net external creditor standing. However, the rating is still constrained by high inflation risk. What's more, increasing unpredictability of various policy enforcement agencies hamper domestic and foreign investment, needed to support the economic growth.