In a move that must have delighted boosters of Russian ABS, Standard & Poor's last week upgraded the class A notes of a Russian leasing deal to BBB+' after it did the same to the long-term corporate rating of the transaction's lessee, Russian Railways. Dubbed Red Arrow International Leasing, the transaction consists of a six-year final, RUR12.6 billion ($475 million) senior tranche initially rated BBB-'.

Moody's Investors Service rated the deal Baa2' at issuance, a grade that remains the same and has consistently been two rungs below the agency's local currency rating on the Railways, A3'. Morgan Stanley and CIT Finance Investment Bank led the deal, which included unrated subordinated notes for a total RUR46.7 billion.

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