Moody’s upgrades Oschadbank, Ukeximbank bonds to Caa2

Moody’s Investors Service upgraded the Eurobond
ratings of Oschadbank (OSCHAD) and Ukreximbank (EXIMUK) to Caa2 (from Caa3) and
upgraded their rating outlook to positive (from neutral), the agency reported
on Aug. 30. The ratings and outlooks were upgraded to sovereign levels, which
were revised on Aug. 25.

The rationale for the upgrade for the twin state banks
were identical: strengthening profitability and capital adequacy; their
“adequate liquidity positions”; as well as their high inter-linkage with
sovereign fundamentals.

Alexander Paraschiy: This is what we expected to happenafter Moody’s upgrade of Ukraine’s sovereign rating. The ratings revision
confirms our view that both banks have identical credit and sovereign risk and
thus deserve to be traded on par with sovereign bonds. Therefore, we remain
bullish about all the senior Eurobonds of these banks, which trade at a
1.3-1.4pp spread to sovereign curve.