Fitch Ratings has assigned Uzbekistan’s Agrobank final long-term ratings of 'BB-' for its recently issued $400mn 9.25% five-year senior unsecured Eurobonds and UZS700bn ($54.7mn) 21.75% two-year senior unsecured Eurobonds. This rating aligns with the expected ratings previously announced.
The final ratings were issued following the confirmation of documentation that met previously received information. They mirror the anticipated ratings assigned to Agrobank's Eurobond issues in a report published on September 19, 2024.
The assigned rating is consistent with Agrobank's Long-Term Foreign-Currency Issuer Default Rating (IDR) of 'BB-', given that all transactions will be conducted in US dollars. The Eurobonds are direct, unconditional, and senior unsecured obligations of Agrobank, ranking equally with its other senior unsecured liabilities.
Agrobank's 'BB-' Long-Term IDRs reflect Fitch's assessment of a moderate probability of government support from Uzbekistan, as indicated by the bank's 'bb-' Government Support Rating. This assessment is based on the bank's majority state ownership, its significant role in implementing the government’s economic and social policies, and the manageable cost of potential support relative to the country's international reserves. Furthermore, Agrobank has a history of receiving capital and liquidity support from the government.
The Eurobond terms include financial covenants that require Agrobank to adhere to regulatory capital ratios. Notably, a put option allows bondholders to request early repayment if Uzbekistan loses control of at least 51% of the bank's issued and outstanding voting share capital.
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