Fitch Ratings gave an expected long-term rating of 'BB-(EXP)' to the upcoming US dollar-denominated senior unsecured Eurobonds by the National Bank for Foreign Economic Activity of the Republic of Uzbekistan (NBU). The exact details, including the size, term, and interest rate of the issue, are yet to be determined. NBU plans to use the funds raised from these bonds for general banking purposes. The final rating will be confirmed once the final documents match the information already received.
The expected rating is the same as NBU's Long-Term Issuer Default Rating (IDR) of 'BB-'. This is because the bonds will be senior unsecured obligations of the bank, meaning they will be treated the same as its other senior unsecured debts.
NBU's Long-Term IDR shows Fitch's view that there is a moderate chance of state support for the bank. This is based on:
- The bank is fully owned by the state
- The bank's importance to the financial system
- The bank's role as a key lender to important industries
- The low cost of providing support compared to the country's international reserves
The draft bond documents include a change of control clause. This clause allows bondholders to redeem their notes at face value if the Republic of Uzbekistan no longer directly or indirectly owns more than 50% plus one share of NBU's voting common shares.
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