OREANDA-NEWS. Corporate And Government Ratings: Methodology And Assumptions," published Nov. 19, 2013). This reflects our view of Russia's institutional framework, in which LRGs havevery restricted revenue autonomy and are unable to withstand possible negativeintervention by the federal government.

In accordance with our criteria, we assess KMAO's stand-alone credit profile (SACP) at 'bbb-', one notch higher than the issuer credit rating. The SACP results from the combination of our assessment of an LRG's individual credit profile and the effects we see of the institutional framework in which it operates. The SACP is not a rating but a means of assessing an LRG's intrinsiccreditworthiness under the assumption that there is no sovereign rating cap.

The SACP assessment on KMAO reflects the okrug's strong liquidity, very low contingent liabilities, low debt, and average budgetary performance. We assessKMAO's economy as average overall and neutral for its creditworthiness becauseits very high wealth levels are subject to high concentration, and the economyhas only limited growth prospects, in our opinion. The SACP is constrained by our view of Russia's volatile and unbalanced institutional framework and KMAO's weak budgetary flexibility. We also take into account the okrug's weak financial management in an international context.

Currently, we don't envisage any potential upward revision of our assessment of the okrug's SACP.


The stable outlook mirrors that on Russia. Any rating action we take on the sovereign would likely be followed by a similar action on KMAO.

We view a downside scenario based on KMAO's intrinsic creditworthiness as unlikely, because our assessment of KMAO's SACP is one notch higher than the long-term rating on the okrug.