S&P lifts Alfa Bank Ukraine to ‘CCC+/C’

On Friday Standard & Poor’s upgraded Alfa Bank Ukraine’s long and short-term counterparty credit ratings from ‘SD/SD’ to ‘CCC+/C’ following the completion of the bank’s distressed debt exchange for three loan participation note issues on August 5. The outlook on the ratings is negative. Alfa Bank’s national scale rating was also raised, from ‘SD’, to ‘uaB.’ Andrii Parkhomenko: The move by the agency was expected by us as the fact that Alfa Bank swapped the Eurobonds definitely bodes well for the bank. We estimate that a fair YTM for the 2012 notes should be around 40%, corresponding to a price of ~68. We recommend buying into Alfa’s new Eurobonds below this level.