Russia's Premium

The discord adds to skepticism about whether Ukraine, the U.S., and the European Union will be able to use an April 17 Geneva accord to hold Putin accountable for easing tensions that he says he's had no role in creating. The U.S. and its European allies have demanded Russia help calm the crisis or face new sanctions.

Moody's outlook hinges on there being no further sanctions against Russian businesses, Perevezentsev said. Sanctions would “have additional pressures on the companies' operating cash flows,” he said.

While bond markets are closed, firms have been able to get bank loans. OAO GMK Norilsk Nickel, the country's biggest mining company, agreed to borrow $750 million from international banks to refinance and “enhance” liquidity, it said April 10.

Metalloinvest Holding Co. paid as much as 165 basis points above the one-month London interbank offered rate (Libor) for a $1.15 billion syndicated loan, from lenders including Deutsche Bank AG and ING Groep NV, the company said on March 31.

“The Libor rate is low, while the spread of the Russian debt curve to Treasuries has widened lately,” Dmitry Pikin, who helps manage the equivalent of $4.7 billion at Gazprombank Asset Management, said by phone from Moscow April 17. “When companies borrow on the debt market, investors are looking at spreads.”

The premium investors demand to hold Russian debt over U.S. Treasuries fell 12 basis points, to 300 basis points, on April 17. That's 50 basis points below an almost two-year high on March 14, JPMorgan Chase & Co. indexes show.

While the debt market may re-open in the second half of the year if there is a diplomatic solution to the Ukraine crisis, “the next two months may be difficult,” Pikin said.

Converting Rubles

The government stands ready to offer support using its gold and foreign-currency reserves, which stood at $477.7 billion as of April 11, according to Moody's and Fitch.

The reserves “ensure that there are no foreign currency shortages in the system,” Moody's said in the report this month.

Companies that can't borrow abroad can approach local banks, Raiffeisenbank's analyst Denis Poryvay said by phone from Moscow on April 14.

Banks had $26.7 billion of foreign currency available to lend out at the start of the month, as clients converted ruble holdings into dollars and euros, Poryvay said. The ruble has slumped 7.9 percent this year against the dollar, the worst performance after Argentina's peso among 24 emerging markets. The Russian currency slid 0.2 percent to 35.6925 versus the dollar as of 4:27 p.m. in Moscow today.

“This currency won't leave the country just like that,” Poryvay said. “It's a source of a long-term liquidity for the Russian banking system. So they can refinance at least a part of the corporate loans.”

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