S&P rates Promsvyazbank notes B-

Standard & Poor's said it assigned its B- senior unsecured debt rating, based on draft offering circular documentation, to the proposed loan participation notes to be issued by Promsvyaz Finance SA (not rated).

The notes will be issued on a limited recourse basis, for the sole purpose of financing a fiduciary deposit with J.P. Morgan Bank Luxembourg SA, for the sole purpose of financing a loan to Promsvyazbank JSCB (B-/stable/C). The amount and tenor of the notes will be specified at placement.

S&P said the ratings on Promsvyazbank are constrained by the bank's funding weaknesses, a relatively concentrated loan portfolio, and still-risky operating environment in Russia. Positive rating factors include the bank's good corporate franchise in the developing Russian banking market, solid profitability stemming from good quality revenues, and the growing economy. In addition, the bank benefits from supportive shareholders.

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