S&P rates Vneshtorgbank

Standard & Poor's said it assigned its BB+ long-term and B short-term counterparty credit and certificate of deposit ratings to Russia-based Vneshtorgbank.

The outlook is stable.

At the same time, S&P assigned its BB+ long-term senior unsecured debt rating to Vneshtorgbank's existing $2 billion program for the issuance of loan participation notes. The notes are issued by, but with limited recourse to, Luxembourg-based VTB Capital SA, for the purpose of financing fiduciary deposits with Deutsche Bank Luxembourg SA (AA-/stable/A-1+) for the purpose of financing loans to Vneshtorgbank.

"The ratings on VTB reflect the bank's state ownership and the important role it plays in the foreign trade finance-related corporate sector in Russia, as well as VTB's good capitalization and adequate financial profile," said S&P credit analyst Ekaterina Trofimova. "These strengths are offset, however, by the still-risky banking and economic environment in Russia, the challenges of adopting an ambitious expansion and diversification strategy, and the bank's high - albeit decreasing - lending concentrations."

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