Putin Bonds headed to the Junk Yard

[alice malice]

Besides the hit to a country's image of being rated 'junk,' such a
downgrade can push its borrowing costs up. Many mainstream investment
and pension funds have rules preventing them from buying anything not
classed as investment grade.

According to S&P's own Market Derived Signal (MDS) based on
comparisons of various countries' ratings, CDS and bond prices,
markets have been treating Russian debt as junk since early March
anyway.

Traders are currently pricing it as if it were a BB, a full two steps
below its actual grade, but there has been no further shift down in
the MDS in recent weeks, something that often happens before a rating
is cut for real.




http://www.reuters.com/article/2014/10/24/ukraine-crisis-russia-ratings-idUSL6N0SJ4YK20141024
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Pynchon-l / http://www.waste.org/mail/?list=pynchon-l