Moody's rates Privatbank note Ba2

Moody's Investors Service said it assigned a rating of Ba2 to the guaranteed notes to be issued on a limited recourse basis by U.K. special purpose vehicle Credit Finance plc, and unconditionally and irrevocably guaranteed by CJSC PrivatBank. The proceeds will be used for the sole purpose of funding a loan to PrivatBank.

The outlook is stable.

The holders of the notes will be relying on the ability of PrivatBank to make payments. Moody's Ba2 rating is based on the credit quality of PrivatBank. The rating has pierced Ukraine's Ba3 foreign-currency sovereign ceiling for bonds, the agency said.

PrivatBank's obligations and guarantee will rank at all times at least pari-passu with the claims of all other unsecured and unsubordinated creditors of the bank, save for those claims that are preferred by relevant law. The terms and conditions of the notes contain a negative pledge clause and a cross-acceleration clause, covenants that limit mergers, disposals and transactions with affiliates.

The notes might be eligible for early redemption by the noteholders, Moody's said, if the bank's ratings were to be downgraded in the event that the current shareholders (three prominent Ukrainian businessmen) cease to own more than a 50% stake of the bank.

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