March 20 - Despite numerous leadership changes forecast for Russia's regional governments this year, Standard & Poor's Ratings Services' view of the regions' creditworthiness will likely remain unaffected. This is according to a report titled, "A Wave Of Change For Russia's Governors, But The Ratings Remain The Same," published today on RatingsDirect. In total, we think about a quarter of the 83 governors heading Russia's regional governments could be replaced in 2012. For some, their term of office is expiring. For others, the reduced power of Russia's ruling party, United Russia, renders their own positions uncertain. At the federal level, ongoing leadership reshuffles may result in some governors assuming national posts, while others may be replaced by former federal officials. And if proposed direct elections are introduced at the regional level, some incumbents could be ousted. While a change of leadership theoretically can be accompanied by a change in financial strategy and budget policy, in practice the appointment of a new governor rarely signals an immediate change of sufficient scope to affect our view of a region's creditworthiness and our ratings. In our view, there is no clear link between the poor credit quality of a region and the ability and willingness of its governors to retain their positions. As far as we are aware, since 2005 no governor has been replaced because of weak budgetary performance, high indebtedness, or persistent refinancing risks for the region, unless triggered by obvious mismanagement of budget funds. Moreover, several governors of regions that have what we view as persistent financial difficulties have been regularly reappointed for multiple terms. Similarly, we have not observed a clear link between a governor's appointment and a potential financial policy agenda, given the limited transparency in the current selection process. At the start of this year, outgoing president Mr. Medvedev announced a proposal to resume the direct elections of governors that took place during 1993-2005. A candidate's potential influence, be it positive or negative, on a region's future financial policies and performance would become clearer. If a new governor were to relax previously prudent policies and increase debt and liquidity pressures, or spend beyond the bounds of the region's economic and financial profile, we could lower our rating on a region. We believe, however, that the long-term benefits of holding direct elections would outweigh these challenges. We believe that direct elections could make governors more accountable to the regional representative body and electorate, which might eventually help improve the transparency and efficiency of budgetary spending. Overall, this could strengthen the predictability and resilience of the institutional framework under which Russian regions operate. The report is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail to email@example.com. Ratings information can also be found on Standard & Poor's public Web site by using the Ratings search box located in the left column at www.standardandpoors.com.