Moody’s changes Promsvyazbank to positive

Moody's Investors Service said it affirmed Promsvyazbank’s B2 long-term foreign- and local-currency senior unsecured debt and deposit ratings, and B1 long-term counterparty risk ratings.

Concurrently, the agency upgraded the baseline credit assessment (BCA) to caa2 from ca, adjusted BCA to caa2 from ca, and affirmed the long-term counterparty risk assessment at B1(cr) and foreign-currency senior unsecured medium-term note program at provisional B2.

The outlook on the long-term debt and deposit ratings was changed to positive from developing.

In addition, Moody's affirmed Promsvyazbank’s short-term deposit ratings of Not Prime, short-term counterparty risk assessment of Not Prime(cr) and short-term counterparty risk rating of Not Prime.

The foreign-currency subordinated debt ratings were withdrawn given the default of these bonds in 2017. The foreign-currency subordinated medium-term note program rating and foreign-currency other short-term program rating were withdrawn due to business reasons.

“The rating action follows the crystallization of expected government support in the form of a major recapitalization by the Deposit Insurance Agency (DIA), partial transfer of problem assets, and the disposal of Avtovazbank (AVB), leading to the higher BCA,” Moody’s said in a news release.

“The positive outlook (previously developing) reflects the reduced likelihood of insolvency and Moody's expectations of a recovery in the bank's earnings over the next 12-18 months.”

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