8 Oct 2010 16:31

Moody's downgrades International Industrial Bank to C from Caa2

MOSCOW. Oct 8 (Interfax) - Moody's Investors Service has today downgraded the long-term local and foreign currency debt and deposit ratings of

International Industrial Bank (IIB) to C from Caa2, the agency said in a press release.

The bank's E bank financial strength rating (BFSR) and Not Prime short-term local and foreign currency deposit ratings were affirmed. All ratings are now at their lowest possible levels and the outlook on the global scale ratings is stable.

The downgrade of the debt and deposit ratings to C reflects Moody's expectation that IIB's senior unsecured creditors will incur a loss of more than 50%, with the exception of private individuals with deposits at the bank up to RUB700,000 (which are eligible for 100% repayment by the State Corporation Deposit Insurance Agency. According to Moody's, the rating action was triggered by the withdrawal of IIB's banking licence by the Central Bank of Russia on 5 October 2010 "due to misrepresentation of financial reporting figures and inability to meet its obligations to

creditors". Today's rating action concludes the

review with direction uncertain on the affected ratings initiated by Moody's on 30 June 2010.

The previous rating action on IIB was on 30 June 2010 when Moody's downgraded the following ratings: long-term debt and deposit ratings to Caa2 from B3, and BFSR to E from E+. At that time, the bank's Caa2 long-term ratings were also placed on review with direction uncertain, while the E BFSR and Not-Prime short-term debt and deposit ratings carried stable outlook.

Domiciled in Moscow, Russia, International Industrial Bank reported total unaudited unconsolidated assets of RUB120 million according to local accounting standards as at September 2010, Moody's said.