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Moody's assigns A3 to Russian Agricultural Bank's Loan Participation Notes, outlook stable

February 29, 2008 | Cbonds

Moscow, February 28, 2008 -- Moody's Investors Service has assigned an A3
long-term foreign currency rating to the senior unsecured Loan Participation
Notes ("LPNs") denominated in Swiss francs expected to be issued on a
limited-recourse basis by RSHB Capital S.A., a Luxembourg-based special
purpose vehicle, for the sole purpose of funding loans to Russian
Agricultural Bank ("RAB"). The amount, interest rate and tenor of the LPNs
will be determined at a later stage dependent on market conditions. The
outlook on the rating is positive.

As the ultimate borrower under the transaction, RAB must comply with a
number of covenants such as negative pledge, limitations on mergers and
consolidation as well as maintenance of a capital adequacy ratio above the
minimum level prescribed by the Basel Accord and by the local regulations.
Moody's also notes that the LPNs may be redeemed at the option of the
noteholders in the event that the Russian government -- which currently owns
100% of RAB's capital through the Federal Agency for Federal Property
Management -- ceases to control the bank.

The A3 senior unsecured debt rating is based on RAB's fundamental credit
quality and takes into account all relevant country risks. The rating is
driven by Moody's belief that external support for the bank from the Russian
government would be forthcoming in the event of need, reflecting RAB's key
role in the execution of government policy for financing the development of
agribusiness in Russia, together with its 100% state ownership. The A3
long-term rating for senior unsecured debt issued under foreign law also
reflects Moody's view that those instruments would be less likely to be
captured by a foreign currency payments moratorium than would be the case
for bank deposits.

Headquartered in Moscow, Russian Federation, RAB reported total
(unaudited) consolidated assets of RUB275 billion (US$11 billion) under IFRS
as at 30 June 2007 and net income of RUB584 million (US$23 million) for the
six months then ended.

Company: Russian Agricultural Bank

Full company nameJoint stock company Russian Agricultural Bank
Country of riskRussia
Country of registrationRussia


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