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28.08.2009
Credit-Rating revises Ukrgasbank JSB’s ratings
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it affirmed at uaBBB the long-term credit rating assigned to Kiev-based Ukrgasbank JSB (‘bank’) and the bank’s BDR at ‘4’ (high strength). At the same time Credit-Rating has downgraded to uaBB from uaBBB the long-term credit rating assigned to the bank’s bonds (series A, B, D, E). The amount of the issue is UAH350m. All of the ratings remain on Rating Watch List with negative outlook.
In early June 2009 the Government of Ukraine has adopted a resolution on recapitalization of Ukrgasbank JSB by the state. The Ministry of Finance of Ukraine has issued state domestic bonds in the amount of UAH3.1bn due in 2017-2019 pro rata and interest rate at 9.5% p.a. On July, 6th the National Bank of Ukraine registered new bank’s Articles of Association following the increase of the bank’s authorized stock to UAH3.8bn.
Credit-Rating notes sufficiently high bank’s liquidity figures, which enables the institution to meet in full its scheduled obligations, and obligations towards its other lenders, specifically individual depositors, who are the bank’s current top priority. Once the state entered the bank’s equity and the authorized stock has been increased, the bank has repaid all of the overdue obligations towards the depositors. These prompted upgrade of bank’s BDR to ‘4’ (high strength).
The primary condition for the recapitalization to take place is arrangement by the Expert and Analytical Council on the State Participation in Banks’ Capitalization on conditions for the recapitalization of debts (on bank’s obligations determined by the Council), which will be formalized in relevant documents. During July and August 2009 the bank’s investors claimed a portion of series A and C bonds to be repaid pursuant to terms of bonds’ offering. Thereat the bank has not achieved agreement on restructuring in full the bonds of series A and C (closed issue) yet, neither the bank has repurchased bonds offered for before-due repurchase. Credit-Rating assumes that the bank may act the same way with regard to other bank’s public obligations (series C and D bonds), since the resolution of the National Bank of Ukraine bars trouble banks to perform before-due repurchase of own debentures, except for redemption at under 50% of their face value (pursuant to Clause 3 of the National Bank of Ukraine resolution #421 dated Jul. 28, 2009 ‘On certain issues regarding banks’ activities in financial and economic crisis’).
As of today, the bank’s majority interest is owned by the state. Starting from June 2009 the bank has been managed by the National Bank’s temporary administration.
An obligor or a debt liability with uaBBB credit rating is characterized with the SUFFICIENT creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is affected by adverse changes in commercial, financial and economic conditions.
An obligor or a debt liability with uaBB credit rating is characterized with the LOWER THAN SUFFICIENT creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is strongly affected by adverse changes in commercial, financial and economic conditions.
Negative outlook indicates that there is a possibility to downgrade the rating in the course of the year, on condition that negative tendencies are retained and current risks are realized.
The Rating Watch List is intended to inform financial market participants about possible changes of ratings in short-term prospective. The rating placed on RWL denotes that Credit-Rating is currently considering its change as a result of events or ongoing trends, which may negatively affect creditworthiness of a rating’s bearer.
The bank deposit rating of ‘4’ (high strength) indicates that the bank is sufficiently reliable, although being more vulnerable to impact of adverse commercial, financial and economic factors than banks bearing rating '5'. The probability of bank's failure to return deposits is low.
Information on all credit ratings assigned in accordance with the National Rating Scale may be found in REUTERS and BLOOMBERG information systems.
For more information, please contact:
Information and
analytic department
Sergey Rozumyak +38044490 25 50
SRozumyak@credit-rating.ua
