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Fitch assigns RB Russia Finance Limited’s Loan Participation Notes Programme ‘A-’ Rating

February 13, 2008 |

Fitch Ratings-London/Moscow-13 February 2008: Fitch Ratings has today assigned RB Russia Finance Limited’s USD5bn loan participation notes programme ratings of Long-term ‘A-’ (A minus) and Short-term ‘F2’.

The notes to be issued under the programme will be used solely for financing loans to ZAO Raiffeisenbank, a bank incorporated under the laws of Russia (formerly ZAO Raiffeisenbank Austria). ZAO Raiffeisenbank is rated Long-term Issuer Default rating (IDR) 'A-' (A minus), Short-term IDR 'F2', Support rating '1', Individual rating 'C/D' and National Long-term rating 'AAA(rus)'. The Outlooks for the Long-term IDR and National Long-term rating are Stable.

The programme allows for multi-currency borrowings for various tenors in the form of both senior unsecured and subordinated debt notes. The programme ratings apply to senior unsecured issues only. In the case of subordinated debt issuance, the issue’s features will require further evaluation for the purpose of assigning a rating.

RB Russia Finance Limited, an Irish company, will only pay noteholders principal and interest received from ZAO Raiffeisenbank. The issuer 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. In respect of senior unsecured notes only, the issuer’s claims will rank at least equally with all other unsecured and unsubordinated creditors of ZAO Raiffeisenbank, save those claims preferred by any bankruptcy, insolvency, liquidation laws or similar laws of general application. Under Russian law, the claims of retail depositors rank above those of other senior unsecured creditors.

The programme documentation limits disposals by ZAO Raiffeisenbank and its subsidiaries (the group) and also contains a negative pledge clause, which allows for the creation of an encumbrance (including securitisation) on up to 20% of consolidated total assets of the group. The covenants also oblige the bank to ensure full compliance with the Central Bank of Russia’s minimum mandatory capital adequacy requirement, which is currently 10%. Noteholders will receive a put option upon a change of control event, which is deemed to have occurred if Raiffeisen International Bank-Holding AG (Raiffeisen International) (i) ceases to own or control (directly or indirectly) 50% plus one share of the issued and outstanding voting share capital of ZAO Raiffeisenbank or (ii) no longer has the right to appoint or remove a majority of ZAO Raiffeisenbank’s supervisory council.

Set up in 1996 in Moscow, ZAO Raiffeisenbank is a 99.3%-owned subsidiary of Raiffeisen International, a management holding company for banking, leasing and other financial service subsidiaries operating in 17 Central and Eastern European countries. Raiffeisen International is a fully consolidated subsidiary of Raiffeisen Zentralbank Oesterreich (rated Support ‘1’). At end-Q307, ZAO Raiffeisenbank was the seventh-largest bank by asset size in Russia, with a broad corporate, investment and retail banking franchise. On 23 November 2007, ZAO Raiffeisenbank merged with the smaller Impexbank, focused mainly on retail and small business lending, which was acquired by Raiffeisen International in Q206. The merged bank operates under the Raiffeisen brand. Currently, ZAO Raiffeisenbank has a network of 54 branches and over 180 banking outlets in more than 60 cities of Russia.

Company: Raiffeisen Bank

Full company nameCJSC «Raiffeisenbank»
Country of riskRussia
Country of registrationRussia
IndustryBanks

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