Moody’s cuts Bank of Azerbaijan to Caa3

Moody's Investors Service said it downgraded the foreign-currency senior unsecured debt rating of International Bank of Azerbaijan to Caa3 from B1 and placed it on review for downgrade following its announced debt restructuring.

The bank's B1 long-term foreign- and local-currency deposit ratings and Ba3(cr) long-term counterparty risk assessment were also placed on review for possible downgrade.

In addition, the agency affirmed the ca baseline credit assessment, Not prime short-term deposit and Not Prime(cr) short-term counterparty risk assessment ratings.

Moody’s said the action reflects the announced restructuring of Bank of Azerbaijan’s senior and junior foreign currency debt through an exchange to sovereign debt obligations of the Republic of Azerbaijan. The total foreign debt affected by the restructuring amounts to $3.3 billion (5.6 billion Azerbaijani Manat). The details of the debt exchange are not available yet and will be announced on 23 May.

The announcement noted that the bank’s individual and corporate deposits are not affected by this restructuring and that Bank of Azerbaijan will continue its operations and services as per the normal course of business, the agency explained. The plan will come into force if approved by two-thirds of the affected creditors.

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