Fitch Assigns Kazakhstan’s VTB Upcoming Senior Unsecured Bond ‘BBB-‘

November 23. Fitch Ratings

Fitch Assigns Kazakhstan's VTB Upcoming Senior Unsecured Bond 'BBB-'Fitch Ratings has assigned JSC VTB Bank (Kazahkstan)’s (VTBK) KZT15bn upcoming senior unsecured bond a Long-term local currency rating of ‘BBB-‘ and a National Long-term rating of ‘AA(kaz)’.

The issue has a fixed rate of 7% and four years maturity.

VTBK’s obligations under the bonds will rank equally with the claims of other senior unsecured creditors, except the claims of retail depositors, which under Kazakhstani law rank above those of other senior unsecured creditors. At end-Q310 retail deposits funded only 2.3% total assets, while equity/assets ratio was a high 85.4%.

VTBK’s current ratings are Long-term foreign and local currency Issuer Default (IDRs) ‘BBB-‘/Stable, Short-term foreign currency IDR ‘F3’, Support ‘2’ and National Long-term ‘AA(kaz)’/Stable.

VTBK is 100% owned by Russian based JSC Bank VTB (VTB, ‘BBB’/Stable). The subsidiary began its banking operations in May 2009. VTBK plans to position itself as a universal bank with a primary focus on corporate/SME segments, providing traditional banking services and trade finance facilities to clients in trade/services industries.