S&P downgrades Alliance Bank (Kazakhstan)
15.04.09 17:31
/Standard & Poor's, Frankfurt, April 14, 09, heading by KASE/ - Standard &
Poor's Ratings Services said today it lowered its long- and short-term
counterparty credit ratings on Kazakhstan-based Alliance Bank JSC (Alliance) to
SD' (selective default) from 'CC/C' after the bank failed to make a payment on
one of its financial obligations. The ratings were removed from CreditWatch,
where they were placed with negative implications on March 20, 2009.
We understand that the bank missed a payment on a loan that matured on March
19, 2009. According to our definition, a selective default is representative of
an issuer defaulting selectively, that is, defaulting on one issue or a class of
issues, but honoring others in a timely fashion. Our default definitions include
payment defaults on both rated and unrated financial obligations.
"We lowered the credit ratings to 'SD', assuming that Alliance Bank continued to
honor its other obligations, although there is a high risk that it will stop
doing so in the near term," said Standard & Poor's credit analyst Annette Ess.
"Under our criteria, we treat distressed exchange offers to restructure debt
obligations as equivalent to a default on the part of the issuer, even
though--technically--the investors may accept the offer voluntarily and no legal
default occurs."
The Agency of the Republic of Kazakhstan on Regulation and Supervision of
Financial Markets and Financial Organizations has instructed Alliance to prepare
a restructuring and recapitalization plan that can be agreed with its creditors.
The bank has started negotiating with its creditors to obtain a three-month
grace period in which to prepare this plan. We understand that this would only
relate to certain financial obligations, and the bank is currently maintaining
its banking operations.
We understand that Samruk Kazyna National Welfare Fund's acquisition of a
majority stake in Alliance Bank has not yet been finalized and is uncertain
under the current circumstances.
"We would lower the ratings on Alliance to 'D' (default) in the event that the
bank defaults on all or substantially all of its debt, initiates a wide-ranging
distressed restructuring of its debt obligations, or declares bankruptcy or
insolvency," said Ms. Ess.
We would consider revising the ratings if the bank were to restore and sustain
its repayment capacity and were to service all its debt obligations on a timely
basis and avoid distressed debt restructuring, either through government support
or improvements in its stand-alone credit profile.
For further information please contact:
Annette Ess, Frankfurt, 49 (69) 33 99 9 1 57
Ekaterina Trofimova, Paris, 33 (1) 44 20 67 86
Magar Kouyoumdjian, London, (44) 20 7176 7217
E-mails of analysts:
annette_ess@standardandpoors.com
ekaterina_trofimova@standardandpoors.com
magar_kouyoumdjian@standardandpoors.com
FIG_Europe@standardandpoors.com
[2009-04-15]