RPT-Fitch assigns AK BARS Bank's RUB5bn bonds 'A+(rus) ' rating
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Aug 22 (Reuters) - (The following statement was released by the rating agency)
Fitch Ratings has assigned AK BARS Bank (ABB) a Long-term local currency Issuer Default Rating (IDR) of 'BB-' with Stable Outlook.
Fitch has also assigned ABB's RUB5bn issue of senior unsecured bonds (series BO-3) with a coupon rate of 8.85% and the final maturity in August 2016, a final National Long-term rating of 'A+(rus)'. ABB's other ratings remained unaffected.
KEY RATING DRIVERS AND SENSITIVITIES
The issue's rating corresponds to ABB's Long-term local currency IDR of 'BB-' and National Long-term Rating of 'A+(rus)', which in turn reflect the moderate probability of support from the Republic of Tatarstan (RT; 'BBB'/Stable).
Downward pressure on ABB's Long-term local currency IDR of 'BB-' and National Rating and hence the issue's rating, could arise if there was any major weakening in the relationship between RT and the bank, for example, as a result of changes in any key senior regional officials or pressure from the federal authorities for RT to divest its stake in the bank (although neither of these are currently expected by Fitch).
Upside potential for ABB's Long-term local currency IDR of 'BB-' and National Rating and hence the issue's rating may emerge if (i) its shareholding structure is streamlined, resulting in a majority stake being held by the RT or an RT-controlled entity; and/or (ii) ABB's related party business decreases and corporate governance improves, thereby reducing the risk of support for the bank being less politically acceptable or too costly.
For more information on the bank's ratings/drivers see 'Fitch Affirms Ak Bars Bank to 'BB-'' dated 19 August 2013 at www.fitchratings.com.