Fitch Ratings upgrades Oschadbank rating

Fitch Ratings has downgraded JSC State Savings Bank of Ukraine’s (Oschadbank) Long-term foreign currency Issuer Default Rating (IDR) to ‘RD’ (Restricted Default) from ‘C’ and then upgraded it to ‘CCC’, according to Bloomberg citing the official Fitch Ratings report.

Fitch downgraded Oschadbank’s Long-term and short-term foreign currency IDRs to ‘RD’ from ‘C’ following the completion of the restructuring of its $700 million and $500 million Eurobonds due in March 2016 and March 2018, respectively.

The restructuring terms included the extension of these bonds’ maturity and increase in coupon rates.

Read alsoCreditors agree to restructure $1.3 bln debt of Ukraine's OschadbankThe affirmation of the bank’s Viability Rating (VR) at ‘ccc’, the upgrade of the foreign currency Long-term IDR to ‘CCC’ and the assignment of ‘CCC’ ratings to the new senior unsecured debt issues reflect Fitch’s assessment of the bank’s standalone credit profile following its debt restructuring. In particular, the debt exchange (which affected $1.2 billion of Eurobonds, accounting for 20% of end-1H15 liabilities) has contributed to a significant lengthening of the bank’s external debt maturity profile, thereby reducing refinancing risks. In Fitch’s view, the bank’s foreign currency liquidity at end-1H15 (comprising cash and equivalents and short-term interbank placements) was sufficient to meet near-term wholesale funding maturities even prior to the restructuring. However, Fitch also notes that stability of the bank’s highly dollarised deposit base is key to maintaining FX liquidity.