Moody’s: National Factoring view to negative

Moody’s Investors Service said it changed the outlook on National Factoring Co.’s B3 long-term local- and foreign-currency deposit ratings and B3 local-currency debt rating to negative from stable.

Moody’s also said it affirmed these ratings and affirmed the company’s not-prime short-term local- and foreign-currency deposit ratings and the b3 baseline credit assessment.

The key driver for changing the outlook is the increasing fragility of National Factoring’s funding and business profiles, given its high reliance on funding from a related group of companies and particularly from Bank Uralsib, whose long-term deposit ratings were recently downgraded, the agency said.

Funding from Bank Uralsib and related companies accounted for about 46% of National Factoring’s non-equity funding, Moody’s said.

Therefore, given the limited funding alternatives, the ability to roll over this funding is very important for National Factoring’s business and liquidity profiles, the agency said.

Although Moody’s said it believes the willingness of Bank Uralsib and related companies to provide such funding remains high, the recent downgrade of Bank Uralsib’s ratings means a weakened credit profile of the major fund provider and increasing refinancing risk for National Factoring.

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