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December 21, 2007 |
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ACTIVE-BANK: Moody's Puts B3/NP Global Scale Sr. Debt Ratings Moody's Investors Service assigned a prospective B3/NP global scale local currency long- and short-term senior unsecured debt rating to Active-Bank, as well as a Baa3.ua long-term National Scale Rating to the local currency-denominated bonds amounting to UAH100 million that the banks intend to issue. The bonds will represent a senior unsecured claim on the bank and will be issued with a final maturity of five years. The outlook for the global rating is stable, while the NSR carries no specific outlook. According to Moody's, the B3/NP global scale local currency ratings reflect global default and loss expectation and is not constrained by any foreign currency transfer risk, while the Baa3.ua NSR reflects the standing of the bank's credit quality relative to its domestic peers. Moody's prospective B3 rating for the bonds is based on Active- Bank's fundamental credit quality and factors in the bank's ability to fulfill its long-term obligations. The obligations include those 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 bonds back to the bank on the first, second, third and fourth anniversaries of the notes issue. Moody's notes that if the bank's credit quality were to deteriorate at these times, the exercise of the put options might exert additional pressure on its financial condition. Moody's notes that, in general, Ukraine is 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. Headquartered in Kiev, Ukraine, Active-Bank reported total assets of UAH1.7 billion (US$333 million) in accordance with Ukrainian accounting standards as at 30 September 2007 and net income of UAH16.1 million (US$3.2 million) for the nine months then ended. |
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