Fitch Rates Mongolia's XacBank's Senior Notes 'B(exp)'
(The following was released by the rating agency)
HONG KONG, March 27 (Fitch) Fitch Ratings has assigned Monglia-based XacBank LLC's (XacBank) proposed foreign currency senior unsecured notes, to be issued under its USD300m medium term notes (MTN) programme, an expected rating of 'B (exp)' and Recovery Rating 'RR4'. The final rating is contingent upon the receipt of final documents conforming to information already received.
The notes are rated at the same level as XacBank's Long-Term Foreign Currency Issuer Default Rating (IDR) of 'B', as they will constitute direct, unsubordinated and senior unsecured obligations of the bank, and will rank equally with all its other unsecured and unsubordinated obligations. 'RR4', denoting recovery rates between 31%-50%, is the highest Recovery Rating that can normally be assigned to any issue ratings by Mongolian banks based on the agency's methodology.
The proceeds will be used for funding and general corporate purposes. Fitch also believes a proportion will be used for refinancing existing non-deposit funding maturing in 2012. The latter includes about USD40m borrowed funds and USD40m due to banks. After the refinancing, Fitch notes that the bank's funding structure will shift to debt capital market funding from borrowings from development funds. XacBank's ratings and in turn the issue rating for the senior unsecured notes may come under pressure should this change in funding pose material refinancing and margin pressures in future.
HONG KONG, March 27 (Fitch) Fitch Ratings has assigned Monglia-based XacBank LLC's (XacBank) proposed foreign currency senior unsecured notes, to be issued under its USD300m medium term notes (MTN) programme, an expected rating of 'B (exp)' and Recovery Rating 'RR4'. The final rating is contingent upon the receipt of final documents conforming to information already received.
The notes are rated at the same level as XacBank's Long-Term Foreign Currency Issuer Default Rating (IDR) of 'B', as they will constitute direct, unsubordinated and senior unsecured obligations of the bank, and will rank equally with all its other unsecured and unsubordinated obligations. 'RR4', denoting recovery rates between 31%-50%, is the highest Recovery Rating that can normally be assigned to any issue ratings by Mongolian banks based on the agency's methodology.
The proceeds will be used for funding and general corporate purposes. Fitch also believes a proportion will be used for refinancing existing non-deposit funding maturing in 2012. The latter includes about USD40m borrowed funds and USD40m due to banks. After the refinancing, Fitch notes that the bank's funding structure will shift to debt capital market funding from borrowings from development funds. XacBank's ratings and in turn the issue rating for the senior unsecured notes may come under pressure should this change in funding pose material refinancing and margin pressures in future.
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