OREANDA-NEWS. S&P Global Ratings today said it has affirmed its 'BB+/B' long - and short-term foreign currency issuer credit ratings and 'BBB-/A-3' long - and short-term local currency issuer credit ratings on Russian state-owned development bank Vnesheconombank (VEB). The outlook remains negative.

We base the ratings on our opinion of VEB as a government-related entity (GRE)with an almost certain likelihood of receiving extraordinary support from the Russian government in the event of financial difficulties. Accordingly, we equalize our ratings on VEB with those on Russia.

In accordance with our criteria for GREs, our view that there is an almost certain likelihood of extraordinary government support is based on our assessment of VEB's:

Critical role for Russia as the government's prime public development institution, a role that cannot be readily undertaken by a private entity. The VEB group's assets currently represent about 5.5% of Russia's GDP; and

Integral link with Russia. This is because of VEB's unique status as a state corporation operating under the law "On The Bank For Development," with strong oversight from the federal government and prime minister, represented on its supervisory board. Also, the government has a proven track record of providing timely support to VEB in all circumstances, including through a recent $6 billion subsidy resulting from a lower interest rate on subordinated deposits and direct capital injections to VEB. Furthermore, high-ranking government and central bank officials have reiterated the government's strong commitment to VEB after the imposition of U. S. sanctions.

We assess VEB's stand-alone credit profile at 'CCC+'.

The negative outlook reflects the possibility that we could reconsider our assessment of the likelihood of government support to Vnesheconombank.

Weaker government support could be seen, for example, by the government's reluctance to approve the bank's revised business strategy or explicitly factor in its support for Vnesheconmbank in the upcoming budget cycle. The rising risk of a material and rapid weakening of VEB's capitalization or liquidity, in the absence of the government's explicit commitment to provide timely and sufficient financial support, could also signal such a scenario. Wecould take a similar action if the government reduced VEB's role as a prime development institution.

We could revise the outlook to stable if the visibility of government support to VEB was confirmed by the government's approval of the bank's updated strategy and its explicit budgeting of financial support to the bank in next year's budget.