The Republic of Chuvashia, which belongs to Russian Federation, is working with the International Finance Corp. on a RUR1 billion (37 million) transaction. The multilateral is providing a partial guaranty - its first the Russian domestic market in about six years - that will cover any potential shortfall owed to bondholders, for up to 23% of the outstanding principal amount, according to a report from Moody's Investors Service. The agency rated the deal Ba2' on the global scale and Aa2.ru' on the national scale. Chuvashia has an issuer rating of Ba3' and Aa3.ru', respectively, indicating that the ratings boost from the guaranty was a single notch. The IFC declined to give more information at press time.

Chuvashia is a predominantly rural region that is home to 1.36 million inhabitants. It lies 400 kilometers east of Moscow. Among the less-developed areas of Russia, the republic has been courting foreign investors. Chuvashia is the country's center for growing hops and is known throughout Russia for beer brewing, according to the Web site of the U.S.-Russia Business Council.

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