Moody’s lowers Bank of Azerbaijan debt

Moody's Investors Service said it downgraded the following ratings of International Bank of Azerbaijan (IBA): Long-term local- and foreign-currency deposit rating to B1 from Ba3; senior unsecured debt rating to B1 from Ba3; and long-term subordinated debt rating to B2 from B1.

Concurrently, the agency downgraded the standalone baseline credit assessment (BCA) to ca from b3 and the counterparty risk assessment to Ba3(cr) from Ba2(cr). The short-term deposit ratings were affirmed at Not-Prime, while the short-term counterparty risk assessment was affirmed at NP(cr).

The outlook on the long-term deposit and senior unsecured ratings is negative.

Moody’s said the downgrade of the baseline credit assessment to ca reflects the bank’s significantly weakened standalone financial position with reported negative capital as of end-2016 according to local GAAP. Capital erosion was exacerbated by foreign exchange (FX) losses given the bank's large open FX position of AZN 6 billion as of end-2016 amid 13% local currency depreciation in Azerbaijan, the agency added.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.