Moody's changes outlook on DeltaCredit Bank's Baa2 deposit ratings from negative to stable
LONDON. July 6 (Interfax) - - Moody's Investors Service said on Wednesday that it changed the outlook on the Baa2 long-term local and foreign currency deposit ratings
of Bank DeltaCredit ("DeltaCredit") to stable from negative.
The agency said in a statement: "The following ratings assigned to DeltaCredit are unaffected by this announcement:
- the standalone bank financial strength rating (BFSR) of D with a stable
outlook;
- the Prime-2 short-term deposit ratings; and
- the bank's A2 long-term local currency debt rating benefitting from an
explicit and irrevocable guarantee issued by Societe Generale Group
(rated C+, Aa2 on review for possible downgrade / Prime-1). The bank's A2
local currency guaranteed debt rating is on review for possible
downgrade, reflecting the rating review of its guarantor, Societe
Generale Group, which was announced on June 15, 2011.
"The rating agency explained that the revision of the outlook on
DeltaCredit's deposit ratings reflects Moody's view that parental support
to DeltaCredit, in case of need, will likely be forthcoming directly from
Societe Generale Group, despite the fact that effective from January
2011 100% of DeltaCredit's stake is controlled by the Group's other
Russian subsidiary, Rosbank (rated Baa2/Prime-2/D, with stable outlook),
as opposed to direct ownership by Societe Generale previously. Rosbank,
in turn, is 79.8656% controlled by Societe Generale following the
completion of the final stage of the legal integration process for all of
the French group's Russian subsidiaries on 1 July 2011."
"The negative outlook assigned previously to DeltaCredit's ratings
reflected Moody's view that after the integration, whereby DeltaCredit
would be indirectly owned by Societe Generale via Rosbank, support would
potentially stem from the immediate parent (which is financially weaker
than Societe Generale), as opposed to direct support from the French
group previously," Olga Ulyanova, Moody's Vice-President and
lead analyst for the bank was quoted as saying in the statement.
She said: "However, after the transfer of DeltaCredit's ownership to Rosbank, we have seen additional evidence of Societe Generale's direct support to DeltaCredit, which included the provision by the French group of the explicit and irrevocable guarantee for
DeltaCredit's domestic bond issues in the aggregate amount of RUB15
billion. Societe Generale also directly maintains its standby liquidity
facilities readily available for DeltaCredit, which had been the case
before the French group ceased to hold a direct stake in DeltaCredit".
The statement said: "As a result, DeltaCredit's global local currency (GLC) deposit ratings incorporate a three-notch uplift to Baa2/Prime-2 from the bank's
long-term scale of Ba2 in accordance with Moody's Joint Default Analysis
(JDA) methodology, due to the rating agency's assumption of very high
probability of parental support to DeltaCredit from Societe Generale Group."