Fitch Rates DeltaCredit Bank's Upcoming Debut RUB LPNs 'BBB+(EXP)'

Tue Jan 21, 2014 10:37am EST

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(The following statement was released by the rating agency) MOSCOW, January 21 (Fitch) Fitch Ratings has assigned DeltaCredit Bank’s (DeltaCredit; BBB+/Stable/bb+) upcoming debut RUB loan participation notes an expected Long-term rating of ‘BBB+(EXP)’. The notes will be issued by an Ireland-based special purpose vehicle, DCB Finance Limited, which will on-lend the proceeds to DeltaCredit. The issue amount, maturity and coupon rate are yet to be determined. The final ratings are contingent on the receipt of final documentations conforming to information already received. KEY RATING DRIVERS The notes are rated in line with DeltaCredit’s ‘BBB+’ Long-term local currency Issuer Default Rating (IDR) which is driven by potential support the bank may receive from its ultimate parent, France's Societe Generale (SG; A/Stable) and constrained by the Russian Country Ceiling of 'BBB+'. In Fitch's view, SG would have a strong propensity to support the bank, given its controlling stake and strategic commitment to the Russian market; the bank's small size relative to the SG group limiting the burden of any support required; and significant contagion/reputational risks for SG as a result of default of the subsidiary. RATING SENSITIVITIES Any action on DeltaCredit’s Long-term IDR would impact the issue’s rating. Changes to the bank's Long-term IDRs would correspond to changes of Russia's Country Ceiling. Possible downward pressure could also arise if there is a multi-notch downgrade of SG or a marked reduction in the strategic importance of the Russian market for SG, none of which Fitch currently expects. DeltaCredit’s other ratings are unaffected: Long-term foreign and local currency IDRs: 'BBB+'; Outlook Stable Short-term foreign currency IDR: 'F2' Support Rating: '2' National Long-term rating: 'AAA(rus)'; Outlook Stable Viability Rating: 'bb+' Senior unsecured debt: 'BBB+'/'AAA(rus)' Contact: Primary Analyst Dmitri Vasiliev Associate Director +7 495 956 5576 Fitch Ratings CIS Limited 26 Valovaya Street Moscow 115054 Secondary Analyst Konstantin Yakimovich Analyst +7 495 956 9978 Committee Chairperson James Watson Managing Director +7 495 956 6657 Media Relations: Julia Belskaya von Tell, Moscow, Tel: +7 495 956 9908, Email: julia.belskayavontell@fitchratings.com; Hannah Huntly, London, Tel: +44 20 3530 1153, Email: hannah.huntly@fitchratings.com. Additional information is available at www.fitchratings.com. Applicable criteria, "Global Financial Institutions Rating Criteria", dated 15 August 2012 are available at www.fitchratings.com. Applicable Criteria and Related Research: Global Financial Institutions Rating Criteria 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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