Fitch revises Azerbaijan Mortgage Fund's outlook to stable; affirms at 'BBB-'
Azerbaijan, Baku, May 21 / Trend A. Akhundov /
Fitch Ratings has revised the Outlook on the Azerbaijan Mortgage Fund under the Central Bank of Azerbaijan Republic (AMF) to Stable from Positive and affirmed its Long-term foreign currency and local currency ratings at 'BBB-', Fitch Ratings said today.
The rating action reflects the revision of Azerbaijan's Outlook (see "Fitch Revises Azerbaijan's Outlook to Stable; Affirms at 'BBB-'" dated 11 May 2012 at www.fitchratings.com) as well as Fitch's assessment of continuing robustness of the support framework in place for AMF from its sponsor (Central Bank of Azerbaijan Republic).
AMF's ratings are equalised with the Azerbaijan sovereign rating, reflecting the entity's public sector status, its tight control by the sovereign through the central bank and its important role in the government's housing finance policy. Fitch uses its public-sector entities rating criteria and applies a top-down approach in its analysis of AMF. Provision of affordable housing is a high priority for the state. Article 43 of the constitution recognizes the need to respond to the country's housing demand, particularly in light of the increasing demand for higher standard urban housing within the country.
AMF was established as a public sector entity by decree No. 299 of the president of the Republic of Azerbaijan in September 2005. AMF's main purpose is to create funding mechanisms which provide home ownership to Azerbaijani citizens, through long-term financing, and to attract domestic and foreign investment into mortgage financing. It reports directly to the central bank whose management board acts as AMF's board of directors. Although it has its own separate budget, AMF receives budget income appropriations. The entity's accounts are audited by an independent auditor appointed by the central bank.