S&P lowers Turk Eximbank

Standard & Poor’s said it lowered the local-currency long-term counterparty credit ratings on Export Credit Bank of Turkey (Turk Eximbank) to BBB- from BBB, along with its local-currency short-term counterparty credit ratings to A-3 from A-2.

The agency also affirmed the bank’s foreign-currency long-term rating at BB+ and short-term rating at B.

The outlook is negative.

S&P said it equalized the ratings on Turk Eximbank with those on its sole owner, the Republic of Turkey.

The ratings reflect an opinion that there is an almost certain likelihood that the Turkish government would provide timely and sufficient extraordinary support to the bank in case of financial distress, the agency said.

The bank plays a critical role in supporting Turkish exports, which is a key factor of national economic development, S&P said.

And the bank has an integral link with the Turkish government through the sovereign’s sole ownership, government control of the board of directors and the sovereign’s guarantee on the ultimate recovery of losses on the bank’s sovereign lending, the agency said.

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