Russia announced Monday it has paid off in full its remaining $23.7-bln debt to the Paris Club of Creditor Nations.
The notes are serviced by the German government, which holds an AAA rating, but linked to Russia's performance in repaying its Paris Club debt to Germany.
"The upgrade reflects the fact that the credit event of Russia defaulting on its Paris Club debt to Germany (the risk that previously constrained the transaction's ratings at 'BBB') can no longer be triggered. Therefore, Standard & Poor's assesses the likelihood that Germany will continue to service the Aries transaction as consistent with a rating of 'AAA'," the agency said.
The likelihood that Russia, which has a rating of BBB, will have new Paris Club debt to Germany "has been assessed as consistent with a rating of 'AAA' over the remaining life of the transaction."
S&P also removed the ratings from CreditWatch. If the German government buys back the notes from the issuer, the ratings on the notes will be withdrawn, the agency said.
