RPT-Fitch Assigns Turk Eximbank 'BBB-' IDR; Outlook Stable
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Sept 18 (Reuters) - (The following statement was released by the rating agency)
Fitch Ratings has assigned Turkiye Ihracat Kredi Bankasi A.S. (Turk Eximbank) Long-term foreign and local currency Issuer Default Ratings (IDR) of 'BBB-' and 'BBB', respectively. The ratings have Stable Outlooks. A full list of rating actions is at the end of this rating action commentary.
KEY RATING DRIVERS - IDRS, NATIONAL RATING, SUPPORT RATING AND SUPPORT RATING FLOOR
Turk Eximbank's IDRs and National Long-term Rating are aligned with those of the Turkish sovereign (BBB-/Stable), reflecting its ownership (100% state-owned) and status as the country's official export credit agency. Turk Eximbank implements the government's official export strategies, its board is government appointed, and its funding is, in part, provided or guaranteed by the Turkish treasury. The bank also enjoys privileges, notably treasury compensation of losses suffered as a result of political risks and exemption from corporate taxes and loan loss reserve requirements.
The bank's credit expansion targets, policies and objectives are defined by Turkey's Supreme Advisory and Credit Guidance Committee (SC), chaired by the Prime Minister and including high-level government officials. Export strategies form part of Turkey's short- and medium-term development plans. Turk Eximbank's board includes two SC members and its CEO is also a member of the SC. The Turkish treasury's willingness to guarantee Turk Eximbank's international borrowings, if required by lenders, is also indicative of an additional level of government support for the bank. Fitch has not assigned a Viability Rating as it is not meaningful to assess such a 'policy' type bank on a standalone basis.
The Support Rating of '2' reflects Fitch's assessment of the Turkish sovereign's propensity and ability to support Turk Eximbank, if required. Given the bank's ownership and role, Fitch believes there is a high probability that support would be forthcoming from the Turkish state in case of need. The Support Rating Floor is equalised with the Turkish sovereign's foreign currency Long-term Issuer Default Rating, as is the case with other Turkish state-owned banks.
RATING SENSITIVITIES - IDRS, NATIONAL RATING, SUPPORT RATING AND SUPPORT RATING FLOOR
Turk Eximbank's ratings are sensitive to a change in Turkey's sovereign ratings, and the Long-term IDR and National rating will very likely move in tandem with these. The Stable Outlook on Turk Eximbank's ratings reflects that on the sovereign.
The rating actions are as follows:
Long-term foreign currency IDR assigned at 'BBB-'; Outlook Stable
Long-term local currency IDR assigned at 'BBB'; Outlook Stable
Short-term foreign and local currency IDRs assigned at 'F3'
National Long-term Rating assigned at 'AAA(tur)'; Outlook Stable
Support Rating assigned at '2'
Support Rating Floor assigned at 'BBB-'
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