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December 02, 2005 | Cbonds

Loan Participation Notes issued by N-Invest S.A. upgraded to Ba3 from B1. Outlook stable.

Moody's Investors Service has assigned Ba3 long-term and Not-Prime short-term foreign currency deposit ratings and a D- (D minus) Financial Strength Rating (FSR) to the recently-formed Uralsib Bank. All ratings carry a stable outlook.

The ratings reflect the bank's standing following the recent mega-merger of Ural-Siberian Bank, Nikoil IBG Bank, Avtobank-Nikoil and two other regional banks, which has led to the birth of a new key player on the Russian banking scene, with a presence and combined expertise in all segments of investment, corporate and retail banking.

At the same time Moody's has upgraded to Ba3 from B1 the Loan Participation Notes (Notes) due March 2007 issued by, but with limited recourse to, N-Invest S.A. (Luxemburg) for the sole purpose of financing a fiduciary deposit to Deutsche Bank Luxembourg S.A., which, in turn, is used for the sole purpose of financing a loan to Nikoil IBG Bank. The outlook for the rating is also stable. This action reflects the total and entire assumption of all rights and obligations arising from these notes by Bank Uralsib.

The Ba3/NP ratings are based on the fundamental credit strengths of Bank Uralsib and do not incorporate any potential support from the authorities in case of need. In Moody's opinion, some external support may be forthcoming in case of need, but the probability for such support is not sufficient to notch the ratings above the level commensurate with the bank's intrinsic strength. A limited degree of support can be expected from the Russian government, since the new entity is likely to become one of the top five banks in terms of deposits from individuals. Some support may be expected from the Republic of Bashkortostan in the event of need, bearing in mind the importance of the bank to the local economy and its dominant position as deposit-taker from the republic's population. Support may even be forthcoming from the bank's beneficial shareholders, although its timeliness and extent may be uncertain.

The D- FSR assigned to Bank Uralsib is underpinned by its demonstrated capacity to develop its franchise even during the merger period, as well as by its large branch network and strong capital base. The FSR is at the same time constrained, mainly by Bank Uralsib' high market risk in relation to its proprietary securities portfolio as well as by its high dependence on non-recurring earnings and its still unproven capacity to generate cost savings as a result of the merger.


Headquartered in Moscow, Russian Federation, Bank Uralsib officially started operating as a single entity following the merger of five banks on 3 October 2005. It is controlled by Urasib Financial Corporation, a financial conglomerate involved in asset management, insurance, investments in non-financial companies, real estate and others. According to unaudited IFRS-based consolidated statements as of 30 June 2005, the source of which are management accounts of the merged banks on a standalone basis, BankUrasib's total assets were estimated at RUR169.4 billion (US$5.90 billion), capital at RUR27.9 billion (US$974 million) and net profit at RUR3.1 billion (US$108 million). This newly merged bank has become the sixth or seventh-ranking bank in Russia by total assets and fourth by shareholders' capital, as of 30 September 2005.

Issue: IBG NIKoil, 9% 19mar2007, USD

StatusCountry of riskMaturity (option)AmountIssue ratings (M/S&P/F)
redeemedRussia03/19/2007150,000,000 USDBa3/-/-


Full company nameJSC Financial corporation Uralsib
Country of riskRussia
Country of registrationRussia
IndustryFinancial institutions


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