January 17, 2005 | Cbonds
|Cbonds (www.cbonds.info) prepared the Ukrainian investment banks league tables based on results of 2004. The tables takes into account 58 bond issues, placed in the course of 2004. The overall amount of bond issues accounted for – 944.2 mln hryvnias. The rating can be found on Cbonds.Info website at: http://www.cbonds.info/underwriters/ib-rating_2004-4.phtml|
UkrSibbank has taken the first place in the league tables by a head (same like in 2003). In 2004 UkrSibbank placed bonds of 8 isuers (10 series) in total amount of 175 mln hryvnias.
First Ukrainian International Bank came in second in 2004, having placed two major issues – D-series of Chernomorneftegaz and 2A-series of Metilen worth 128 mln hryvnias. It is the most significant advancement in the league tables in 2004, as in 2003 the bank was on 15th place with one issue worth 15 mln hryvnias.
The 3rd place in the tables (like in 2003) belongs to Alfa-bank of Ukraine. In 2004 the bank placed issues of 4 borrowers (5 series) in total amount of 95 mln hryvnias. It is worth mentioning that Alfa-bank placed a bond issue of Energoatom in amount of 430 mln hryvnias in 2004. However, we did not classify is it as a market issue, along with the issues of the other large government companies placed in 2003. We tend to consider such issues a separate group of instruments on Ukrainian bond market.
The 4th place in 2004 tables has been given to Ukrsozbank (in 2003 Ukrsozbank was on the 4th place as well). Last year the bank placed debts of 4 issuers 5 series) in total amount of 63 mln hryvnias.
The last but not east in the top five is Nadra bank with its two issues worth 53.5 mln hryvnias (8th place in the rating in 2003).
Rating formation approach
While working on the league tables we took into account only sizes of the actually placed market issues.
Rating calculation method
1. We considered the issues as “market” issues in case if they met the following criteria:
• Placement with a rather wide range of investors – informational transparency of the issuer. First of all it includes availability of the issue prospectus, investment memorandum, analytics on the issue provided by the underwriter etc. It is preferable that the issue terms could be interesting to the majority of investors (banks, investment companies, etc). This condition does not apply to bank bonds.
• Issue maturity. Since most issues are short- and middle-term ones, we consider issues with 1 to 5-year tenor (depending on the interest rate) to be “market” issues.
• Interest rate. We determined the interest rate of the market issues in the following ranges: 1) bank bonds – from 12% p.a. in hryvnias; 2) corporate bonds of large, financially stable issuers – 14-16% p.a.; 3) second-tier corporate issuers – 16-18%; 4) low quality corporate bonds – from 20%.
• Existence of secondary market. Considering low liquidity of the Ukrainian bond market, we take into account the formal trading of the issuer’s bonds, since it appears problematic to distinguish the market deals from non-market ones.
Classification of the issues into market and non-market reflects purely the opinion of the rating's authors.
2. The rating is calculated on the basis of issues, the placement of which was begun in 2004 with amounts placed within the period in question.
3. If several investment banks took part in the placement, the issue size is divided among them based on their share in placement.
4. The own issues of banks and investment companies placed in 2004 have been taken into account as well.