The invasion of Ukraine by Russia has cost the government a lot. It has been isolated from the international financial system due to sanctions.
Sanctions have cut off Russia's access to much of its foreign reserves, threatening to plunge the country into default as it could struggle to meet its foreign debt payments. The ruble has plummeted to record lows and the stock market has been paralyzed for weeks.
S&P Global this week cut Russia's credit rating to "CC", which is imminent with little prospect for recovery, four years after the agency awarded Russia an investment.
The government will struggle to raise capital on the global market. The future of many of its biggest companies is in doubt. S&P Global said this week that it had made 121 changes to the ratings of companies that cited the Russia-Ukraine war, rising energy prices, or both as reasons. 77 were Russian.
In terms of creditworthiness, the Russian-Ukraine conflict has had the largest impact on banks, with 28% of total related rating actions, the agency said.
The investors are taking no chances. The risk premium on European emerging-market corporate debt is almost double its five-year average, according to S&P Global Ratings. Banks, energy producers and mining companies are no longer lucrative. Commodity traders are shunning Russian shipments of key raw materials and countries are trying to wean themselves off Russian energy supplies.
The agency said there are already 30 fallen angels as a result of the Russia-Ukraine conflict. The issuer's credit rating has been cut from investment grade to speculative grade.
Sberbank, oil and gas producers, Norilsk and Rusal, and metal producers are all no longer traded in New York or London.
And it will not end there. S&P Global said there was a lot of uncertainty about the outcome of the war.
S&P said that sanctions and related political risks are likely to remain in place for some time.
S&P shared several charts that show the impact on the creditworthiness of Russian companies.
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