Fitch rates Kazakhstan’s Sberbank subordinated bonds ‘BB+’

Dec 23. Reuters

Fitch rates Kazakhstan's Sberbank subordinated bonds 'BB+'Fitch Ratings has assigned Kazakhstan-based Subsidiary Bank Sberbank of Russia ‘s (SBK) KZT20bn subordinated bonds a Long-term local currency rating of ‘BB+’ and a National Long-term rating of ‘AA-(kaz)’. The bank has a Long-term local currency Issuer Default Rating of ‘BBB-‘ and a National Long-term rating of ‘AA(kaz)’, both with Stable Outlook.

This KZT20bn notes represent the Series 1 bonds issued in the framework of the bank’s 2nd subordinated note programme with the total volume of KZT100bn. The Series 1 issue carries a fixed interest rate of 7% and matures in 2018.

The subordinated bonds’ Long-term ratings are notched one level below SBK’s senior debt, reflecting the former’s lower recovery prospects for investors.

SBK, formerly Texakabank, was established in 1993 in Kazakhstan. Russia-based Sberbank (‘BBB’/Stable), which currently owns 100% of SBK, acquired the bank in 2007. At end-10M11, SBK had a 3.6% market share of the Kazakh banking system’s assets.