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Fitch Rates Bank of Moscow's Senior Eurobond Expected 'BBB'

January 24, 2008 | Сbonds

Fitch Ratings has today assigned Kuznetski Capital S.A.'s upcoming issue of Swiss franc-denominated limited recourse loan participation notes an expected Long-term 'BBB' rating. The notes are to be used solely for financing a loan to Russia's Bank of Moscow ("BOM", rated Long-term Issuer Default ("IDR") 'BBB' with a Stable Outlook, Short-term IDR 'F3', Support '2', Individual 'D' and National Long-term 'AA+(rus)' with a Stable Outlook).

The final rating is contingent on the receipt of documents conforming materially to information already received.

Kuznetski Capital S.A. will only pay noteholders amounts (principal and interest), if any, received from BOM under a loan agreement. Kuznetski Capital S.A. will charge certain of its rights and interests under the loan agreement to BNY Corporate Trustee Services Limited for the benefit of noteholders under a trust deed. The lender's claims in relation to the repayment of the loan will rank at least equally with the claims of other senior unsecured creditors, save those preferred by relevant (bankruptcy, liquidation, etc.) laws. Under Russian law, the claims of retail depositors rank above those of other senior unsecured creditors. At end-H107, retail deposits accounted for 27% of BOM's total liabilities, according to the bank's International Financial Reporting Standards (“IFRS”) audited accounts.
The loan agreement contains covenants restricting disposals by BOM and its subsidiaries and a negative pledge clause, which limits securitisations to 10% of total assets as per BOM’s consolidated IFRS accounts.

BOM was established in 1995 and is now one of Russia's five largest banks in terms of assets. A significant share of BOM's business is concentrated in the City of Moscow; however, focus has been given to regional development. The City of Moscow currently owns 44% of BOM directly and controls 15% through Moscow Insurance Company (Insurer Financial Strength ‘BB’/Outlook Stable). The latter is owned by the recently founded Capital Insurance Group, in which the city and BOM have stakes of 25% plus one share and 25%, respectively.

Company: BM-Bank

Full company nameBM-Bank (Public Joint Stock Company)
Country of riskRussia
Country of registrationRussia


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