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Concorde Capital Rearch: Fitch confirms B- ratings of Oschadbank, Ukreximbank

July 25, 2018 | Cbonds

Fitch Ratings confirmed the B- credit ratings of Ukraine’s State Savings Bank (Oschadbank, OSCHAD) and State Export-Import Bank (Ukreximbank, EXIMUK) and stable outlooks for the ratings, according the agency’s July 23 press release. The rating action “reflects limited changes to the banks' standalone credit profiles and Fitch's view of potential support to these institutions, if required, from the government,” the agency commented. Therefore, the state banks’ ratings are kept at the sovereign level.

Fitch also commented that full repayment of the banks' Eurobonds, which start amortizing next year, “will depend on the banks' ability to receive timely and full repayment due on their respective USD 3.3 billion and USD 2.6 billion sovereign bond portfolios”.

Out of USD 1,200 mln of Oschadbank Eurobonds outstanding, USD 455 mln are amortizing in 2019. Out of USD 1,475 mln of Ukreximbank Eurobonds, USD 437 mln are amortizing in 2019.

Alexander Paraschiy: We support Fitch’s view that the credit profiles of Oschadbank and Ukreximbank are linked to the ability of the Ukrainian government to service its debt. So far, the banks remain government financing agents with their management remaining fully accountable to the government, whose representatives control the banks’ supervisory boards. Earlier in July, the Ukrainian parliament approved a law that stipulates new principles for creating the supervisory boards of state banks, with the majority of seats on the boards being offered to independent members. However, the passed bill has yet to be signed by the president. Meanwhile, our position remains that the banks have pretty the same risk profile as the Ukrainian government does, meaning that the banks’ Eurobond yields should be the same as for sovereign bonds.

Company: Oschadbank

Full company nameJoint Stock Company "State Savings Bank of Ukraine"
Country of riskUkraine
Country of registrationUkraine


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