MOODY'S ASSIGNS BA2 RATING TO ALLIANCE BANK'S (KAZAKHSTAN) SENIOR UNSECURED NOTES ISSUE; STABLE OUTLOOK

/REUTERS, London, June 8, 05/ - Moody's Investors Service has assigned a Ba2 long-term rating to the upcoming issue of senior unsecured notes by Alliance Bank. The amount of the issue is expected to be US$150 million with a tenor of three years. The rating is subject to reviewing the final documentation on the issue. The outlook for the rating is stable. The bank's existing Ba2 (stable outlook) long-term foreign currency deposit rating, Not- Prime short-term rating and E+ (positive outlook) financial strength rating remain unchanged. The Ba2 rating is based on the bank's fundamental credit quality, which factors in a limited degree of support from the Kazakhstani authorities in case of need, given the bank's strengthening franchise and increasing importance to the national banking system. Moody's notes that, while the predictability of such support is still relatively low, this is nevertheless captured in the bank's Ba2 rating. Under the terms of the bond issue, Alliance Bank must comply with certain covenants, such as negative pledge, limitation on payment of dividends, limitation on mergers and sale of assets and maintenance of a minimum BIS Capital Adequacy Ratio of 10%. Alliance Bank is headquartered in Almaty, Kazakhstan, and reported total assets of US$922 million and capital of US$123 million under IFRS at 31 December 2004. Following three years of rapid growth, Alliance Bank ranked sixth-largest by assets and fifth-largest by capital in Kazakhstan as at year- end 2004, with shares of the system's total assets and shareholders' equity at 4.5% and 6.0%, respectively. [2005-06-08]