Fitch upgrades Oschadbank Eurobonds to “CCC”

Fitch Ratings has assigned a “CCC” rating for the new notes of the State Savings Bank of Ukraine (Oschadbank, OSCHAD), according to the ratings agency’s press release from Sept. 14. The rating of the old notes, which were in the process of restructuring, was “C”. Before the upgrade, the agency downgraded the foreign currency rating of the bank to “RD” as the restructuring process was recognized as a “distressed debt exchange,” given that the process included a significant maturity extension. Recall on Aug. 3, the holders of Oschadbank 2016 (USD 700 mln) and 2018 (USD 500 mln) Eurobonds voted to extend the notes’ maturity by seven years and increase their coupon rates by 1.125-0.75 (order is not in reverse?) percentage points.

Alexander Paraschiy: Now Oschadbank’s Fitch rating is on par with its peer Ukreximbank (EXIMUK), Ferrepo (FXPOLN) and MHP (MHPSA), all of which are two notches above the rating of Ukrainian government bonds (UKRAIN, “C”), which have yet to be restructured. The upgrade of OSCHAD bonds to “CCC” was a broadly expected event given that Fitch performed a similar ratings adjustment with the notes of Ukreximbank following their restructuring.