International rating agency Fitch Ratings has affirmed National Clearing Center's ratings, namely long-term foreign currency IDR at BBB-, long-term local currency IDR at BBB, and stability rating at bbb. The bank's local currency IDR and BFSR are a notch higher than the foreign currency IDR and Russia's sovereign rating of BBB-. The long-term IDR rating carries a stable outlook. The full list of rating actions is given in the agency's press release.
National Clearing Center that operates on the basis of a banking license is a major operating subsidiary of Moscow Exchange Group, a central clearing counterparty in the currency market, securities markets, repurchase transactions, derivatives and commodities. The company is an intermediary between market participants and acts as a counterparty under every transaction, finally being responsible for the fulfillment of the obligations to stock market participants if one or several participants is or are unable to fulfill their obligations.
The affirmation of NCC's local currency IDR reflects its exceptionally strong creditworthiness in the context of the Russian market based on the company's internal stability. The company has high resistance to potential losses due to strong risk management and risk control, mainly the short-term nature of deals and good financial stability that is also solidified by an additional safety margin and by limiting the highest amount of losses (and any above-limit losses should be divided among other market participants). The stability rating also reflects NCC's strong liquidity, good financials, countercyclical and cheap base of funds, the agency said in the press release.
NCC's stability rating and local currency IDR are higher than Russia's sovereign rating of BBB- because the agency thinks that NCC will likely retain its ability to serve ruble obligations even in case of a sovereign default due to strong risk management. In addition, Fitch expects NCC to tighten security requirements if market stress gains momentum. At the same time, the company's creditworthiness is closely connected with the internal operating environment and, as a consequence, Fitch limits the rating by a notch above the sovereign rating.
NCC's long-term foreign currency IDR of BBB- is constrained by Russia's country ceiling. The foreign currency IDR is stipulated by the stability rating, but it is also bolstered by potential sovereign support, which is underscored by the long-term IDR support rating of BBB- that corresponds to the sovereign rating.
