Fitch rates International Industrial Bank notes B

Fitch Ratings said it assigned IIB Luxembourg SA's upcoming issue of limited recourse loan participation notes expected ratings of long-term B and recovery ratings of 4. The notes are to be used solely for financing a loan to Russia's International Industrial Bank, which is rated issuer default B with stable outlook, short-term B, individual D and support 5. Final ratings are contingent upon receipt of final documentation conforming materially to information already received.

Noteholders will rank at least equally with the claims of other senior unsecured creditors of IIB, save those preferred by relevant laws. Under Russian law, the claims of retail depositors rank above those of other senior unsecured creditors, the agency said.

The loan agreement contains a negative pledge clause, which allows for a certain degree of securitization by IIB and its subsidiaries. In the event of any securitization, Fitch said the nature and extent of any over-collateralization would be assessed by the agency for any potential impact on unsecured creditors.

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