Fitch assignes Alliance Bank's eurobond final "В+" rating

/Moscow bureau REUTERS, November 18, 05/ - Fitch Ratings has today assigned ALB Finance B.V.'s USD200 million 9.000% eurobond due November 2010 a Final Long-term 'B+' rating. ALB Finance B.V. is a Netherlands-domiciled subsidiary of Kazakhstan's Alliance Bank ("Alliance"), which is rated Long-term 'B+', Short-term 'B', Individual 'D', and Support '4'. The Outlook on the Long-term rating is Stable. Proceeds from the issue of the notes will be deposited with Alliance. Alliance has unconditionally and irrevocably guaranteed the timely and full repayment of the notes in the trust deed between Alliance, ALB Finance B.V. and the trustee, J.P. Morgan Corporate Trustee Services Limited. The terms and conditions of the notes specify that they will rank at least pari passu with the claims of other unsecured creditors of the issuer and that the obligations of Alliance under the guarantee will rank at least pari passu with claims of other unsecured creditors of Alliance, save those preferred by relevant (bankruptcy, liquidation etc.) laws. Under Kazakh law, the claims of retail depositors rank above those of other senior unsecured creditors. At end-H105, retail deposits accounted for around 16% of Alliance's total liabilities, according to the bank's unaudited Local Accounting Standards (similar to IFRS) accounts. Covenants limit Alliance's dividend payments to 50% of net income in any particular year and also specify that the terms of all transactions of more than USD2 million must be concluded on a market basis. Alliance also commits to maintaining a total BIS capital adequacy ratio of 10%, and a cross default clause becomes applicable in case of overdue debt in excess of USD10m. The terms and conditions of the notes contain a negative pledge clause, which allows for a degree of securitisation by Alliance. In the event of such a securitisation, Fitch notes that the nature and extent of any over-collateralisation would be assessed by the agency for any potential impact on unsecured creditors. Noteholders will benefit from a put option should the bank's Long-term credit rating be downgraded as a result of an asset sale by, or a merger of, Alliance. At end-H105, Alliance was the fifth largest bank in Kazakhstan with a market share of approximately 6.7% of total sector assets. [2005-11-18]