S&P placed ratings of Alliance Bank JSC on CreditWatch with negative implications
24.03.09 12:35
/Standard & Poor's, Frankfurt, March 20, 09, heading by KASE/ - Standard &
Poor's Ratings Services said today that it placed its 'B/B' counterparty credit
rating on Kazakhstan-based Alliance Bank JSC (Alliance) on CreditWatch with
negative implications. The rating had been on CreditWatch with developing
implications since Feb. 3, 2009, after Samruk Kazyna announced its proposed
acquisition of majority stakes in the bank.
"The rating action reflects our view of the reduced likelihood of government
support and the increasing possibility of a restructuring of the bank's debt
obligations. We understand that the government is not willing to guarantee
Alliance's foreign debt," said Standard & Poor's credit analyst
Annette Ess, CFA.
We classify Kazakhstan as an "interventionist" country regarding its support of
systemically important banks such as Alliance. Although Samruk Kazyna's
majority takeover of Alliance has still not been completed and is likely to take
some time, we currently factor in one notch of government support for Alliance's
systemic importance.
The rating action also reflects our view of the continuing downward pressure on
the bank's stand-alone credit profile due, among other things, to significant
asset- quality deterioration, which is depleting its capitalization. Also
contributing to the rating action are what we see as continuing funding and
liquidity challenges and the instability of deposits. We believe that Alliance
is also affected by the current global liquidity crisis and a severe domestic
economic slowdown, both of which continue to erode liquidity levels and asset
quality.
We expect to resolve the CreditWatch after obtaining information on the
probability of Alliance's debt restructuring, finalization of the acquisition by
Samruk Kazyna or Samruk Kazyna's decision not to acquire the bank, and further
clarification of the implications of government ownership for Alliance's
creditworthiness, strategy, and financial flexibility. If debt restructuring is
imminent we would change the ratings to 'D'. Barring any further deterioration
in its operating environment, we may affirm the current ratings if Alliance
decides not to restructure its debt and to meet all its obligations in a timely
manner; if we consider that extraordinary state support is more likely; or if
the government's enhancement measures sustainably strengthen Alliance's
stand-alone credit profile.
For more information please contact:
Ekaterina Trofimova, Paris, 33 (1) 44 20 67 86
Magar Kuyamjan, London, (44) 20 7176 7217
Annette Ess, CFA, Frankfurt, (49) 69-33-999-157
E-mails of analysts:
ekaterina_trofimova@standardandpoors.com
magar_kouyoumdjian@standardandpoors.com
annette_ess@standardandpoors.com
FIG_Europe@standardandpoors.com
[2009-03-24]