What Russian and China basically did was create new rating agencies to give each other legitimacy. Here we now have the end result. As the U.S. suicidally declines, look for these to gain traction.
MOSCOW, February 2 (Sputnik) — Gazprom’s AAA investment rating with Chinese rating agency Dagong will help reduce the costs of obtaining Chinese loans, which in turn will help to ensure the completion of the energy companies’ projects with China, BCS financial analyst Kirill Tachennikov told Sputnik on Monday.
“The rating is necessary in order to approve a lower rate for these loans, for formal reasons,” Tachennikov explained, noting China’s interest in Gazprom’s Siberian projects, including ‘Altai’ and ‘The Power of Siberia’ pipelines. “[The Chinese] are interested in seeing Gazprom takes loans from them in order to be in control of the situation and to ensure that this project is completed,” the expert noted.
Tachennikov added that while “Gazprom does not face any problems with liquidity at the moment, the prerequisites for improving the rating don’t exist either. Oil prices have fallen, and gas prices are tied to them. In the coming year there will be little reason to say that Gazprom has a higher creditworthiness than say, six months ago.”
Full article: Gazprom’s AAA Credit Rating Ensures Cheap Credit for China Projects (Sputnik News)