Fitch Ratings-Moscow/London-08 July 2015: Fitch Ratings has assigned Bank Centercredit's (BCC) upcoming series 7 senior unsecured local currency bonds under the second bond issuance programme an expected Long-term rating of 'B(EXP)' and an expected National Long-term rating of 'BB+(kaz)(EXP)'. The issue's expected Recovery Rating is 'RR4(EXP)'. The issue's volume is KZT10bn, it matures in ten years and has a 9% coupon paid semi-annually.
KEY RATING DRIVERS
The issue's ratings are aligned with BCC's Long-term local currency Issuer Default Rating (IDR) of 'B' and National Long-term rating of 'BB+(kaz)'. BCC's ratings reflect its weak asset quality, moderate capitalisation, modest profitability and near-term business risks stemming from the slowdown in Kazakhstan's economy and lower oil prices. However, the ratings are supported by the bank's reasonable coverage of currently recognised problem loans, track record of continued debt repayments, solid liquidity cushion and limited amount of remaining senior wholesale funding.
Any changes to BCC's Long-term local currency IDR would impact the issue's ratings. The ratings would be downgraded in case of material further asset quality deterioration, capital erosion and/or a liquidity squeeze. An upgrade would require a balance sheet clean-up and/or significant improvements in capitalisation and core performance.
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Date of relevant rating committee: 27 February 2015
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