Fitch downgrades Ukreximbank to 'C'
KYIV. March 31 (Interfax) - Fitch Ratings on March 31, 2015, downgraded JSC The State Export-Import Bank of Ukraine's (Ukreximbank) Long-term foreign currency Issuer Default Rating (IDR) and senior debt rating to 'C' from 'CC'.
The bank's other ratings are unaffected by these rating actions, Fitch said.
According to Fitch, the downgrade reflects the rating agency's view that default by the bank on its external debt obligations is now inevitable. This follows the public announcement by the bank on March 27, 2015 on initiation of talks with the holders of its $750 million eurobond notes to extend the notes' maturity from April 27, 2015 to July 27, 2015. This short-term extension is necessary to "negotiate a long-term solution with the noteholders in accordance with the targets established in the four-year $17.5 billion extended fund facility for Ukraine approved by the IMF on March 11, 2015".
Apart from the $750 million eurobond due on April 27, 2015, Ukreximbank has a $600 million senior eurobond due in January 2018 and a $125 million subordinated bond due in February 2016.
Fitch expects these bonds to also be the subject of negotiations with creditors.
Fitch expects to downgrade Ukrexim's Long-term foreign-currency IDR to 'RD' (Restricted Default) if the bank does not repay its outstanding eurobond on April 27.
The ratings of the three outstanding bonds are now all at the lowest possible levels for instrument ratings, and so would not be subject to further downgrades in case of a restructuring.
Ukreximbank was founded in 1992, and the bank's only shareholder is the government. According to the National Bank of Ukraine, the bank was ranked 3rd by assets among the country's 158 banks currently in operation.