Moody�s and Fitch Ratings Lower Rating of International Bank of Azerbaijan

Baku / 16.05.17 / Turan: International rating agencies have reacted to the situation around the International Bank of Azerbaijan.

Thus, Moody's and Fitch Ratings downgraded the rating of IBA.

Moody's said it lowered the rating of the senior unsecured debt in the foreign currency of IBA to Caa3 from B1 and put it on the list for a downward revision.

The list for downward revision included long-term deposit ratings in local and foreign currency (B1) and long-term counterparty risk assessment (Ba3 (cr)).

In addition, Moody"s has affirmed its short-term deposit ratings in local and foreign currency at NP, the base credit rating at ca, and the short-term counterparty risk assessment at NP (cr).

According to the forecasts of Moody"s, the announced plan for restructuring the external debt of IBA will lead to credit losses for creditors exceeding 20%.

Fitch Ratings also downgraded the long-term issuer default rating (IDR) in the foreign currency of IBA to CCC from BB and placed it on the list for revision (RWE).

Fitch also downgraded the short-term IDR in foreign currency of IBA to C from B, also placing it on the RWE list. The agency retained the bank's stability rating at the f level, and also lowered the bank's support rating to 5 from 3.

The report says that the decline in the ratings of IBA reflects the opinion of Fitch that the default is a real possibility both because the restructuring of senior obligations can be the exchange of bad debts (by Fitch criteria) and because it is expected to prolong the moratorium on the obligations service until the completion of debt restructuring.

Recall that earlier IBA announced that it would suspend payments on external debt and offer investors to exchange part of their debts for sovereign bonds of Azerbaijan.

In general, IBA intends to restructure external liabilities for a total of $ 3,337,105,084. ---- 71D