Fitch Places Altyn Bank on Rating Watch Positive

Fitch assigns 'BB' IDR to Kcell JSC; Outlook Stable

Fitch Ratings has placed Altyn Bank’s (AB) ‘BB’ Long-Term Issuer Default Rating (IDR) on Rating Watch Positive (RWP). The rating action follows the announcement of AB’s parent, Halyk Bank of Kazakhstan (HB; BB/Stable), that it has signed a memorandum of understanding with China Citic Bank (BBB/Stable) to sell a 60% stake in AB. A full list of rating actions is available at the end of this rating action commentary.

KEY RATING DRIVERS

The RWP on AB’s IDRs and Support Rating reflects Fitch’s expectation that should China Citic Bank acquire a majority stake in AB, the latter’s ratings are likely to be upgraded due to potential support from a higher-rated new majority owner.

Fitch expects the deal to be finalised in 1H17, subject to regulatory approvals from the authorities of the People’s Republic of China and the Republic of Kazakhstan.

RATING SENSITIVITIES

Fitch expects to resolve the Rating Watch on AB’s ratings upon the completion of the transaction. Depending on the timing of the transaction and the availability of information, the resolution of the Rating Watches could extend beyond the typical six-month horizon.

The ratings could be upgraded based on Fitch’s evaluation of the probability of support available from China Citic Bank.

If the transaction does not occur, Fitch will likely affirm the existing ratings provided HB’s ability and propensity to support AB do not materially change.

The rating actions are as follows:

Long-Term Foreign and Local Currency IDRs: ‘BB’; placed on RWP
Short-Term Foreign Currency IDR: ‘B’; placed on RWP
National Long-Term Rating: ‘A+(kaz)’; placed on RWP
Support Rating: ‘3’; placed on RWP

November 11, 2016 – Cbonds

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