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Moody's changes outlook on Forum Bank's Ba1 deposit rating to negative from stable (Ukraine)

April 22, 2011 Moody's Investors Service
Moscow, March 02, 2011 -- Moody's Investors Service has today changed the outlook on the Ba1 long-term global scale local currency deposit rating of Forum Bank (FB) to negative from stable. At the same time FB's bank financial strength rating ("BFSR") of E+ (stable outlook), long-term global scale foreign currency deposit rating of B3 (stable outlook), its Not Prime short-term global scale local and foreign currency deposit ratings and National Scale Rating ("NSR") of Aa1.ua remained unchanged.


This rating action was triggered by Moody's recent rating action for FB's parent Commerzbank (rated A2/Prime-1/C-), whereby the rating agency lowered Commerzbank's baseline credit assessment (BCA) to Baa2 from Baa1,while maintaining a negative outlook on Commerzbank's BFSR. Consequently, a negative outlook on Commerzbank's BFSR of C-, which now maps into a BCA of Baa2, translates into a negative outlook on FB's local currency deposit ratings.

Moody's further said that it continues to maintain an assumption of high probability of parental support from Commerzbank to its Ukrainian subsidiary in case of need given the history of liquidity and capital support from the parent, which results in a three-notch uplift of FB's long-term deposit ratings of Ba1 from the bank's BCA of B1, in accordance with Moody's Joint-Default Analysis ("JDA") Methodology.

Moody's previous rating action on FB was on 12 October 2010, when the outlook on the B3 foreign currency deposit rating was changed to stable from negative following a sovereign rating action.

The principal methodologies used in this rating action were "Bank Financial Strength Ratings: Global Methodology", published in February 2007, and "Incorporation of Joint-Default Analysis into Moody's Bank Ratings: A Refined Methodology", published in March 2007. Other methodologies and factors that may have been considered in the process of rating FB can also be found on Moody's website.

Headquartered in Kiev, Ukraine, FB reported -- as at year-end 2010 -- total unaudited assets of UAH14 billion (US$1.8 billion) according to Ukrainian Accounting Standards.

Moody's National Scale Ratings (NSRs) are intended as relative measures of creditworthiness among debt issues and issuers within a country, enabling market participants to better differentiate relative risks. NSRs differ from Moody's global scale ratings in that they are not globally comparable with the full universe of Moody's rated entities, but only with NSRs for other rated debt issues and issuers within the same country. NSRs are designated by a ".nn" country modifier signifying the relevant country, as in ".ua" for Ukraine. For further information on Moody's approach to national scale ratings, please refer to Moody's Rating Implementation Guidance published in August 2010 entitled "Mapping Moody's National Scale Ratings to Global Scale Ratings."
Company — Forum Bank
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