FITCH ASSIGNS ALLIANCE BANK'S UPCOMING EUROBOND EXPECTED 'B+' RATING
26.10.05 20:58
/REUTERS, Moscow, October 26, 05/ - Fitch Ratings has today assigned
ALB Finance B.V.'s upcoming issue of notes an expected Long-term 'B+'
rating. The notes are to be used solely for financing a deposit with
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.
ALB Finance B.V., a Netherlands-domiciled special purpose vehicle (SPV),
will only pay noteholders principal and interest received from Alliance. In
addition, Alliance unconditionally and irrevocably guarantees the timely and
full repayment of the notes in the trust deed between the bank and the
trustee, J.P. Morgan Corporate Trustee Services Limited. The final rating is
contingent upon receipt of final documentation conforming materially to
information already received.
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 one of the bank's credit
ratings 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.
Contact: Alexei Kechko, James Watson, Moscow, Tel: +7 095 956 9901.
Media Relations: Julian Dennison, London, Tel: +44 20 7862 4080.
Fitch's rating definitions and the terms of use of such ratings are available
on the agency's public site, www.fitchratings.com. Published ratings, criteria
and methodologies are available from this site, at all times. Fitch's code of
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and other relevant policies and procedures are also available from the 'Code of
Conduct' section of this site.
[2005-10-26]