Barclays to cut Russian corporate debt from Global Aggregate index

NEW YORK (Reuters) - Barclays Capital said on Thursday it will cut 36 Russian foreign currency denominated debt issues from its investment grade Global Aggregate index following Moody's Investors Service's decision to downgrade the sovereign to junk status last week.

The removal of the debt from six issuers will be done at the end of February during the month-end rebalancing, Barclays said in a research note. The firm said this removal represents $35.8 billion in debt outstanding. The market value is estimated at $32.68 billion, the firm said.

Affected debt issues in U.S. dollars, euros, British pounds and Swiss francs will no longer contribute to the index returns as of March 1, 2015. The firms are Gaz Capital SA, OJSC Novolipetsk Steel, Novatek Finance Ltd, Russian Railways, Gazprom Neft, and Uralkali OJSC.

Moody's became the second agency to downgrade Russia to junk status, cutting on Feb. 20 the sovereign rating to Ba1 from Baa3.

The move adds to a list of financial headaches for Russia, already hit by currency weakness and a looming recession as it absorbs the double blow of Western sanctions over Ukraine and a halving of world oil prices since last June.

(Reporting By Daniel Bases; Editing by Diane Craft)