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Moody's rates Ukrsotsbank's senior unsecured notes at Ba3, on review for upgrade

February 01, 2007 | Cbonds

London, 31 January 2007 -- Moody's Investors Service has assigned a rating of Ba3 to the Loan Participation Notes (LPN) to be issued by Credit Suisse International on a limited recourse basis for the sole purpose of funding an unsecured and unsubordinated loan to Ukrsotsbank. The rating of the LPNs is under review for possible upgrade, in line with other Ukrsotsbank's ratings.

Moody's notes that holders of the notes will be relying for repayment solely and exclusively on the ability of Ukrsotsbank to make payments under the loan agreement. Moody's Ba3 rating (on review for possible upgrade) is based on the fundamental credit quality of Ukrsotsbank and matches Ukraine's Ba3 (positive outlook) foreign currency sovereign ceiling for bonds. The rating is likely to be upgraded if and when the current owner of Ukrsotsbank completes the sale of a controlling stake in the bank to Intesa Sanpaolo Spa (rated Aa3/P-1/B).

The obligations of Ukrsotsbank to make payments under the loan agreement will rank at all times at least pari-passu in right of payment with the claims of all its other unsecured creditors, save those whose claims are preferred by any relevant law. According to Ukrainian legislation, accounts of individuals are ranked senior in right of payment to the claims under the loan agreement. The loan agreement contains an acceleration clause as well as covenants such as negative pledge, cross default, maintenance of NBU required capital adequacy, limitations on mergers, disposals, transactions with affiliates and restricted payments.

The notes might be eligible for early redemption by the noteholders if the bank's ratings were to be downgraded due to the change of ownership (except the conclusion of the sale to Intesa Sanpaolo Spa). However, Moody's believes that such change of ownership, which may lead to a rating downgrade, is unlikely in the near- to medium-term.

Company: Ukrsotsbank

Full company nameUkrsotsbank PJSC
Country of riskUkraine
Country of registrationUkraine


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