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November 27, 2007 |
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MY BANK: Moody's Assigns B3/NP Ratings on RUR1 Billion Bond Moody's Investors Service assigned these global scale ratings to the local currency-denominated bond amounting to RUR1 billion (approximately US$40 million) to be issued by My Bank: B3 long- term and Not Prime short-term senior unsecured debt ratings. At the same time, Moody's Interfax Rating Agency assigned a Baa3.ru long-term National Scale Rating to the bond. Moscow- based Moody's Interfax is majority-owned by Moody's, a leading global rating agency. The bond will have a final maturity of three years and will represent a senior unsecured claim on the bank. The outlook for the global scale rating is stable, while the NSR carries no specific outlook. According to Moody's and Moody's Interfax, the B3/Not Prime global scale local currency ratings reflect the bank's global default and loss expectation and are not constrained by any foreign currency transfer risk, while the Baa3.ru NUSR reflects the standing of the bank's credit quality relative to its domestic peers. Moody's B3/Not Prime ratings for the bond are based on My Bank's fundamental credit quality and factors in the bank's ability to fulfil its long-term and short-term obligations. The latter includes obligations associated with the put option that the bondholders will, according to the terms of the issue, be able to exercise in order to sell the bond back to the bank after a year from the time of the issue. Moody's notes that, if the bank's credit quality were to deteriorate at these times, exercise of the put options might exert additional pressure on its financial condition. My Bank's obligations to make payments under the bond will rank at all times at least pari-passu with the claims of all other unsecured and unsubordinated creditors of the bank, save for those claims that are preferred by any relevant law. At the same time, we note that Russia is in general a country with individual depositor preference, which may reduce the recovery rates for the bondholders, especially if such deposits were to represent a sizeable proportion of the bank's liabilities in the event of liquidation. My Bank Group is headquartered in Moscow, Russian Federation, and comprises three banks. The group reported total consolidated assets of US$265 million (2005: US$146 million) and total equity of US$31 million (2005: US$13 million) under IFRS as at Dec. 31, 2006. |
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