The credit rating of the Novosibirsk Region (hereinafter, the Region) reflects the share of internal revenues that has grown over the past five years, high share of capital expenditures, and significant volume of current account balance. The rating is constrained by relatively low gross regional product (GPR) per capital and other high indicators of the Region’s economic development.
The credit rating outlook has been changed from Stable to Negative due to an increase in the debt burden expected by ACRA by the end of 2025 to a level above 30% of current revenues, and a subsequent increase in this indicator in 2026. This trend is explained by the need to finance a significant budget deficit, as well as a decrease in the amount of available liquidity. ACRA notes that the Region’s debt has historically been balanced in terms of maturities.
The Novosibirsk Region is part of the Siberian Federal District (SFD) and borders Kazakhstan. The Region is home to almost 2% of Russia’s population and generates 1.4% of the total GRP of the country’s regions. According to the Region’s estimates, its GRP was RUB 2.5 tln in 2024. The Region is a large scientific hub in the SFD. The Region is regularly among the leaders in terms of R&D expenditures and the number of personnel employed in this area (in 2024, the Region ranked seventh and fifth among Russia’s regions for these indicators, respectively).
KEY ASSESSMENT FACTORS
Growing debt load and balanced debt repayment schedule. The ratio of the Region’s debt to its current revenues amounted to 29% in 2024, and this ratio may exceed 30% in 2025 due to the potential achievement of the planned volume of budget deficit. As follows from the draft budget law for the next period, the debt will grow in 2026 and 2027 and may exceed 55% of current revenues by the end of 2027. Debt service expenditures will remain low: the ratio of averaged1 interest expenditures to total budget expenditures (excluding subventions) will not exceed 3.5%.
1 Hereinafter, averages are calculated according to the Methodology for Assigning Credit Ratings to Regions and Municipal Entities of the Russian Federation.
The ratio of debt to GRP does not exceed 4% annually.
The quality assessment of the Region’s debt portfolio is high. This is due to the diversified debt structure and the debt repayment period (which has significantly increased after restructuring), a consistently positive current account balance, absence of the necessity to provide significant support to public sector companies, a consistently decreasing total debt load of municipalities, and the balanced debt policy focused on long-term sources of deficit financing. At the same time, ACRA notes a trend toward an increase in the debt and the Region’s unsuccessful experience in concession projects, which may necessitate support for some companies. There is no information on the Region’s failure to fulfill its financial obligations.
As of the beginning of the year and November 1, 2025, the debt repayment schedule was time-balanced. The annual volume of debt repayments (refinancing) did not exceed 20%. ACRA assumes that short-term debt will not exceed 20% in the next three years.
Growing need for additional financing. The Region has sufficiently liquidity to promptly fulfill its expense obligations, including interest expenditures. As of January 1, 2025, funds in the regional budget’s accounts fully covered debt repayments this year. The liquidity ratio (as per ACRA’s methodology) was 79% in 2024, and will be below 60% by then end of this year (the calculation does not take into account funds of autonomous and budgetary institutions). The coefficient assessment has been adjusted upward by one notch in view of the Region receiving a significant amount of interest income.
The quality assessment of liquidity corresponds to the second category. The Region has a time-proven positive credit record in the public debt market, debt refinancing risks are not high, and accounts payable for budget expenditures are not growing. Nevertheless, ACRA notes that there is a need for additional financing, since the expected budget deficit significantly exceeds the amount of balances on the Regional budget accounts at the beginning of the year.
In 2025, for the first time in a long time, the Region attracted a budget loan to replenish the balance of funds on the single account.
Balanced budget with a moderately high share of internal revenues. The Region ceased to be a recipient of subsidies to equalize budgetary provision in 2025. The averaged share of the Region’s internal revenues in its total revenues (excluding subsidies) in 2022–2026 will amount to 89%. Given that the indicator has been steadily growing, the border value adjustment to 90% is applicable.
The tax and non-tax revenues (TNTR) of the Region’s budget have a balanced structure and low dependence on external markets. Nevertheless, some external shocks will have an impact on their dynamics, which mostly affects corporate income tax revenues. There is no clear dominant sector in terms of tax revenues.
The current version of the budget law assumes that 2025 may be completed with a significant deficit (its size will exceed 10% before deducting permissible excesses). The current dynamics of budget execution show that the planned deficit may still be attained.
In this scenario, the averaged ratio of the balance of current operations to current revenues (according to ACRA’s methodology) will be around 57% for 2021–2025, while the ratio of the averaged indicators of the modified budget deficit to current revenues is expected to stand at
-9.5%. These figures indicate that borrowing will be required to finance capital expenditures. The averaged share of capital expenditures in total budget expenditures for the aforementioned period will significantly exceed 18%.
The quality assessment of flexibility of budget expenditures corresponds to the second category. The share of capital expenditures financed using internal revenues is high and continues to grow. The possibility of reducing capital expenditures is insignificant. The modified free cash flow is often negative but small in magnitude, and the current account balance after interest income and expenditures is regularly positive.
The quality assessment of the Region’s budget profile is at the highest level. Regional tax benefits are insignificant in comparison with budget revenues. In accordance with regional legislation, a certain amount of additional tax revenues is transferred to the municipalities. There are no known cases of violation of budget legislation that could affect the budget profile of the Region. The approach of the Region’s government to budget planning can be characterized as moderately conservative. However, in 2022 the Region stopped itemizing TNTR in its budget law, which complicates the assessment of the accuracy of planning of budget revenues.
Diversified economy with highly developed transportation logistics and scientific research segments. The Region’s economy is diversified as the GRP profile is not dominated by a single industry. The largest contribution to the GRP comes from the wholesale and retail trade and repairs segment (16.8% as per the latest available data for 2023), the manufacturing industry (14.5%), and the transportation and storage sector (12.4%).
In 2024, 20% of shipped products in the Manufacturing sector were from food production, another 5–10% were from beverage production, chemicals, rubber and plastic products, other non-metallic mineral products, metallurgical production, production of finished metal products, computers, electronic and optical products, other transport vehicles and equipment.
In 2020–2023, the averaged GRP per capita in the Region was 73% of the national average. According to ACRA’s estimates, in the mid-term this ratio will id not change significantly. The averaged unemployment rate in the Region in 2021–2024 was 3.6%. The ratio of the average wage to the subsistence minimum (for the working-age population) averaged for the period from 2021 to 2024 was 4.15.
The dynamics of a number of economic indicators make it possible to adjust the assessment of the economic profile upward.
The Region is a major transportation and distribution hub of Siberia and the Far East: it hosts Siberia’s largest airport Tolmachevo and S7 Airlines.
The Region is a major scientific center. In 2023, it accounted for 2.6% of R&D expenditures and 3.1% of R&D personnel. These shares are sustainable.
The population of the Region is significantly urbanized. The pandemic affected the demographics of the Region to a lesser extent than the average demographics of Russia, and outside the pandemic period, the population of the Region grew (or declined to a slower extent than the country average). A continuous migration inflow is positive for the demographic situation in the Region as it plays an important role in maintaining the labor force balance. As a result, the demographic situation in the Region is somewhat more favorable than in the country as a whole.
In 2018–2022, the index of the physical volume of the Region’s GRP (both total and per capita) consistently exceeded the dynamics of the total GRP of the regions of the Russian Federation, but in 2023 there was some lag against the backdrop of rapid growth of the total GRP of the regions. The index of output of basic industries in 2018–2024 in most cases exceeded the national indicator.
KEY ASSUMPTIONS
-
Significant budget deficits in the medium term.
-
Invariably conservative debt policy.
potential outlook or rating change factors
The Negative outlook assumes that the credit rating will highly likely be downgraded within the 12 to 18-month horizon.
A positive rating action may be prompted by:
-
Outstripping growth of current revenues;
-
Acceleration of the socioeconomic development of the Region.
A negative rating action may be prompted by:
-
Debt load exceeding 30% of current revenues and depletion of liquidity;
-
Consistent change of the debt policy in favor of short-term borrowings;
-
Exhaustion of certain economic advantages (for example, regional economy growth rates lagging behind the country averages; deteriorating demographic situation).
issue ratings
Novosibirsk Region, 35022 (ISIN RU000A1043E2), maturity date: November 14, 2028, issue volume: RUB 10 bln — AA(RU).
Novosibirsk Region, 35023 (ISIN RU000A107B19), maturity date: November 22, 2030, issue volume: RUB 20 bln — AA(RU).
Novosibirsk Region, 34024 (ISIN RU000A1099S4), maturity date: August 17, 2029, issue volume: RUB 13.5 bln — AA(RU).
Novosibirsk Region, 34026 (ISIN RU000A10ABC2), maturity date: November 28, 2027, issue volume: RUB 27.8 bln — AA(RU).
Rationale. The above bond issues of the Novosibirsk Region have, in the Agency’s opinion, the status of senior unsecured debt, the credit rating of which corresponds to the credit rating of the Novosibirsk Region.
regulatory disclosure
The credit ratings have been assigned to the Novosibirsk Region and the bond issues of the Novosibirsk Region based on following methodologies: the Methodology for Assigning Credit Ratings to Regions and Municipal Entities of the Russian Federation to calculate the SCA and determine the credit rating and the credit rating outlook of the Novosibirsk Region under the national scale for the Russian Federation; the Methodology for Assigning Credit Ratings to Financial Instruments under the National Scale for the Russian Federation to determine the credit rating of the bond issues under the national scale for the Russian Federation; the Key Concepts Used by the Analytical Credit Rating Agency within the Scope of Its Rating Activities to ensure consistent and uniform application of ACRA’s methodologies, models, and key rating assumptions.
The credit rating of the Novosibirsk Region and the credit ratings of the bond issues the Novosibirsk Region (RU000A1043E2, RU000A107B19, RU000A1099S4, RU000A10ABC2) were published by ACRA for the first time on November 9, 2017, November 17, 2021, December 1, 2023, August 23, 2024, and December 13, 2024, respectively.
The credit rating and the credit rating outlook of the Novosibirsk Region, as well as the credit ratings of the bond issues of the Novosibirsk Region are expected to be revised within 182 days as per the Calendar of sovereign credit rating revisions and publications.
The credit ratings are assigned based on data provided by the Novosibirsk Region, information from publicly available sources (the Ministry of Finance, the Federal State Statistics Service, and the Federal Tax Service), and ACRA’s own databases. The rating analysis was performed using the RAS accounting statements of the Novosibirsk Region as of October 1, 2025.
The credit ratings are solicited and the Novosibirsk Region participated in their assignment.
In assigning the credit ratings, ACRA used only information, the quality and reliability of which were, in ACRA’s opinion, appropriate and sufficient to apply the methodologies.
ACRA provided no additional services to the Novosibirsk Region during the year preceding the rating action.
No conflicts of interest were discovered in the course of credit rating assignment.
The credit ratings of the Novosibirsk Region and the bonds of the Novosibirsk Region (RU000A1043E2, RU000A107B19, RU000A1099S4, RU000A10ABC2) were disclosed earlier than the dates indicated in the Calendar of sovereign credit rating revisions and publications in connection with the prompt implementation of procedures to coordinate the disclosed information with the rated entity. The planned revision date is November 14, 2025, the new revision date is November 14, 2025. The planned disclosure date is November 19, 2025, the new disclosure date is November 18, 2025.
Rating components: the standalone creditworthiness assessment is equal to the credit rating and corresponds to aa.
