Fitch Assigns Alliance Bank's Upcoming Eurobond Expected 'BB-' Rating
30.03.06 21:47
/REUTERS, March 30, 06/ - Fitch Ratings has today assigned Alliance
Bank's ("Alliance") and ALB Finance B.V.'s ("ALB") new USD1.5 billion global
medium-term note programme expected ratings of Long-term 'BB-' (BB
minus) (for senior unsecured notes with maturities in excess of one year)
and Short-term 'B' (for senior unsecured notes with maturities of less than
one year). It has also assigned an expected Long-term 'BB-' (BB minus)
rating to the upcoming USD issue, which is the first draw-down under the
programme. The final ratings are contingent upon receipt of final
documentation conforming materially to information already received.
Alliance is rated Issuer Default 'BB-'(BB minus)/Stable, Short-term 'B',
Individual 'D', and Support '3'.
Public issuance under the programme will be rated separately. Apart from
providing for the issuance of senior unsecured notes, the programme
provides for the issuance of subordinated notes, the ratings of which would
probably be lower than those of senior unsecured notes.
Proceeds from the issuance of senior unsecured notes by ALB will be
deposited with Alliance. Alliance will unconditionally and irrevocably
guarantee the timely and full repayment of such notes in the trust deed
between Alliance, ALB and the trustee, J.P. Morgan Corporate Trustee
Services Limited. ALB is a Netherlands-domiciled subsidiary of Alliance.
Proceeds from subordinated notes issued by ALB will be on-lent to Alliance
under subordinated loan agreements.
Senior notes issued by Alliance under the programme and Alliance's
guarantees of senior notes issued by ALB will rank at least pari passu with all
present or future unsecured senior obligations of the bank, save those
preferred by relevant provisions of law and of general application. Under
Kazakhstani law, the claims of retail depositors rank above those of other
senior unsecured creditors. At end-2005, retail deposits accounted for 13%
of Alliance's total liabilities, according to the bank's audited International
Financial Reporting Standards 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. Covenants also include restrictions on mergers and
consolidations by Alliance.
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
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.
Alliance was founded in 1993 in Pavlodar and in 1999 merged with another
mid-sized regional bank. New shareholders led by Seimar Holding Company
acquired Alliance in 2001, and since then it has grown quickly to become one
of the larger banks in Kazakhstan, ranked fifth by assets at end-H105.
Contact: Alexei Kechko, James Watson, Moscow, Tel: +7 495 956 9901.
Media Relations: Jon Laycock, London, Tel: +44 20 7417 4327.
[2006-03-30]