Fitch Assigns ATF Bank's Perpetual Subordinate Notes 'BB-'
September 19, 2012 Fitch Ratings
Fitch Ratings-London/Moscow-19 September 2012: Fitch Ratings has assigned ATF Bank's USD100m perpetual non-cumulative subordinate notes a Long-term foreign currency rating of 'BB-'.
The bonds were issued in November 2006 via the special purpose vehicle (SPV) ATF Capital B.V. In Q312 ATF Bank decided to transfer the issue from the SPV to its own balance sheet. The interest rate on the notes is set at 10% (to be paid semi-annually) until November 2016, and 7.33% thereafter. ATF has a call option in respect to the notes in November 2016 or on any interest payment date thereafter.
Fitch has used ATF's Long-term Issuer Default Rating (IDR) as the anchor rating for rating the notes, reflecting the agency's view that support from UniCredit S.p.A. ('A-'/Negative) may be available to help the bank service subordinated, as well as senior obligations. However, the four-notch difference between ATF's IDR and the notes' rating reflects two notches each for incremental non-performance risk (a higher probability of non-performance on the perpetual notes relative to senior debt) and greater potential loss severity (lower recoveries in case of default).
Fitch notes that ATF has paid all coupons on the notes to date, notwithstanding the bank's weak stand-alone financial position and its recent need for capital support from UniCredit S.p.A. This track record of support for the notes has limited Fitch's assessment of the incremental non-performance risk on the notes to two notches.
ATF Bank has a Long-term IDRIDR of 'BBB' with a Negative Outlook, Short-term IDR of 'F3', Long-term local currency IDR of 'BBB' with a Negative Outlook, Viability Rating of 'b-', a National Long-term rating of 'AA+(kaz)' with Negative Outlook and a Support Rating of '2'.
ATF could be downgraded if UniCredit S.p.A.'s ratings are downgraded. A downgrade is also possible if Fitch believes that further support from the parent has become less likely, or if a disposal of the subsidiary is being more actively pursued.
ATF was the fifth-largest bank in Kazakhstan, holding around 6.9% of system assets, at 1 July 2012. It is primarily a corporate bank with 109 outlets located throughout Kazakhstan. ATF is ultimately owned by UniCredit S.p.A.
Issue — ATFBank, 10% perp., USD
Country of riskKazakhstan
Redemption (put/call option)
М/S&P/F— / — / —
Company — ATFBank
Full nameOJSC ATFBank