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Uzbekistan’s gov’t ready to back Ipoteka-Bank

Business Materials 24 November 2020 12:13 (UTC +04:00)
Uzbekistan’s gov’t ready to back Ipoteka-Bank

BAKU, Azerbaijan, Nov. 24

By Klavdiya Romakayeva - Trend:

Fitch Ratings assigned Ipoteka-Bank's debut Eurobond issue in the amount of $300 million at a rate of 5.5 percent and maturing in 2025 with a final rating of 'BB-', Trend reports referring to the Fitch Ratings Agency.

Ipoteka-Bank uses proceeds from the issue primarily for lending in foreign currency to local borrowers in Uzbekistan.

The assignment of the final rating follows the receipt of documents conforming to information already received. The final rating is the same as the expected rating assigned to the unsecured notes on 9 November 2020.

The bonds are rated on par with Ipoteka-Bank's Long-term Issuer Default Rating (IDR) because the bonds represent the bank's unconditional, senior unsecured obligations, equal in priority to obligations to its other senior unsubordinated creditors.

The 'BB-' IDR of Ipoteka is driven by Fitch's view of a moderate likelihood of support from the Uzbek government ('BB -' / Stable outlook). This view takes into account the moderate ability, as well as the high willingness of Uzbekistan to provide support to the bank on the basis of majority state ownership, as well as the potentially low cost of supporting Ipoteka-Bank in comparison with the foreign exchange reserves of the state and the history of providing support to state-owned banks, which dominate the banking sector in Uzbekistan.

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Follow the author on Twitter: @romakayeva

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