Fitch Affirms Abanka's Hybrid Instrument at 'C'

Tue Apr 30, 2013 11:40am EDT

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(The following statement was released by the rating agency) WARSAW/LONDON, April 30 (Fitch) Fitch Ratings has affirmed Abanka Vipa d.d.'s hybrid capital instrument (ISIN: XS0283183084) at 'C'. The bank's other ratings are unaffected by this action. RATING ACTION RATIONALE, DRIVERS AND SENSITIVITIES The affirmation follows the bank's announcement on 26 April 2013 of the cancellation of the interest payment on the issue. The capital instrument's rating is notched down once from the bank's Viability Rating of 'cc' and is in the lowest rating category 'C', due to an exceptionally high level of credit risk. The hybrid capital instrument rating could be upgraded if there was a multi-notch upgrade of the bank's Viability Rating and the instrument becomes performing again. If Abanka seeks to support its capitalisation by buying back a large part of the EUR120m hybrid capital instrument issue at a substantial discount, the impact on capital could be material. At end-2012, the bank's Fitch core capital was EUR129m. However, in Fitch's view, any positive impact would be insufficient relative to the bank's overall recapitalisation needs, which the agency estimates at around EUR400m (see 'Fitch Downgrades 5 and Affirms 2 Slovenian Banks, Outlook Negative' dated 5 April 2013 at www.fitchratings.com). The rating actions are as follows: Hybrid capital instrument: affirmed at 'C' Long-term foreign currency IDR: 'B-', Negative Outlook, unaffected Short-term foreign currency IDR: 'B', unaffected Support Rating: '5', unaffected Support Rating Floor: 'B-', unaffected Viability Rating: 'cc', unaffected Contact: Primary Analyst Michal Bryks, ACCA Director +48 22 338 6293 Fitch Polska SA Krolewska 16, 00-103 Warsaw Secondary Analyst Lindsey Liddell Director +44 20 3530 1008 Committee Chairperson James Watson Managing Director +7 495 956 6657 Media Relations: Hannah Huntly, London, Tel: +44 20 3530 1153, Email: hannah.huntly@fitchratings.com. Additional information is available on www.fitchratings.com. Applicable criteria 'Assessing and Rating Bank Subordinated and Hybrid Securities', dated 5 December 2012, are available at www.fitchratings.com. Applicable Criteria and Related Research Assessing and Rating Bank Subordinated and Hybrid Securities here Additional Disclosure Solicitation Status here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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