Moody’s downgrades Finance & Credit Bank for restructuring attempt

Moody’s Investors Service downgraded all the ratings of Finance & Credit Bank (FICBUA), the agency stated on December 5. The biggest downgrade was in the rating of the bank’s Eurobonds: down three notches to “Ca” from  “Caa1”.

The bank’s CEO said in a December 5 press release that he understands the concerns of rating analysts, given the tough political and economic situation in Ukraine, and expressed hopes that the rating will be upgraded after “the situation stabilizes.”

Moody’s described a different picture: in its press release, it said the key reason for the downgrade was the bank’s announced restructuring of its USD 95 mln Eurobond, which Moody’s described as “distress exchange.” Last week, the bank offered holders to restructure their Eurobonds redeemable in January 2014, paying USD 5 mln in cash and the rest in new five-year bonds with their coupon rate lowered to 9.125% from 10.5%. That marked the bank’s second attempt to restructure its Eurobond – the first one took place in December 2009. The original USD 100 mln Eurobonds issued in 2006 were exchanged for USD 5 mln in cash and USD 95 mln in new notes at a higher coupon rate (10.5% vs. 10.375% initially).