Moody’s: Promsvyaz Capital B2

Moody’s Investors Service said it assigned B2 and not-prime local- and foreign-currency issuer ratings to Promsvyaz Capital BV.

The outlook is negative.

The ratings reflect Promsvyaz Capital’s status as a bank holding company and are mainly driven by the B1 standalone credit profiles of its Russian banking subsidiaries: Promsvyazbank and Vozrozhdenie Bank, which together accounted for 98% of the group’s total consolidated assets, Moody’s said.

Promsvyaz Capital’s equity investments in Promsvyazbank and Vozrozhdenie accounted for 61% of its standalone assets as of June 30, the agency said.

The ratings also consider the structural subordination of the holding company creditors relative to the creditors of its operating subsidiaries, Moody’s explained.

As a result, the long-term ratings of the holding company are positioned one notch below the B1 weighted-average adjusted baseline credit assessment of both banking subsidiaries, the agency said.

This rating approach is in line with the agency’s notching practice for holding companies, Moody’s said.

The issuer ratings of the holding company also do not incorporate any support uplift from the government of Russia as Moody’s said it generally believes government support is unlikely to be provided to a foreign holding company.

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