Moody's rates VTB Capital notes Baa2

Moody's Investors Service said it assigned a provisional rating of Baa2 to the series 6 dollar-denominated issue of fixed-rate loan participation notes to be issued by VTB Capital SA under a $3 billion debt issuance program.

The new issue will be of a benchmark size, with a 30-year maturity putable after 10 years.

The notes to be issued by the VTB Capital will be used to fund a loan by Deutsche Bank Luxembourg SA to the JSC Vneshtorgbank, a bank established under the laws of the Russian Federation.

Moody's said that the prospective Baa2 rating incorporates the fundamental credit quality of VTB. The rating also reflects the probability of a sovereign default implied by Russia's Baa3 foreign currency bond rating, and the likelihood that the Russian government could impose a debt moratorium in the event of default on its own foreign currency obligations.

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