Fitch ups Promsvyazbank to B+, rates notes B-, B+

Fitch Ratings said it upgraded Russia-based JSC Promsvyazbank's issuer default rating to B+ from B and assigned an expected B- long-term rating with a recovery rating of RR6 to PSB Finance SA's upcoming subordinated notes issue, expected to be at least $100 million and due 2012, and a B+ long-term rating with a recovery rating of RR4 to PSB Finance's upcoming senior note issue.

The proceeds from the subordinated notes will be used to redeem its outstanding $45 million notes, which were issued via private placement and financed an existing subordinated loan to Promsvyazbank, and for financing a new subordinated loan to Promsvyazbank. Fitch said the terms and conditions of the existing and new subordinated loans are principally the same, although the new loan, and therefore the notes, will carry a fixed interest rate, whereas the existing loan and private placement notes carry a floating rate.

The proceeds from the senior notes will be used solely for financing a loan to Promsvyazbank.

PSB Finance will only pay noteholders amounts (principal and interest) received from Promsvyazbank under the loan agreements.

The agency said the claims of PSB Finance in relation to the subordinated loans will be junior to those of all senior creditors of Promsvyazbank and will rank at least equally between themselves and with the claims of other subordinated creditors of Promsvyazbank.

PSB Finance's claims under the new loan with Promsvyazbank will rank at least equally with the claims of other senior unsecured creditors, save those preferred by relevant (bankruptcy, liquidation etc.) laws. Under Russian law, the claims of retail depositors rank above those of other senior unsecured creditors, and at the end of June, retail deposits accounted for 13% of Promsvyazbank's total liabilities, Fitch said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.