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The downgrade of PrivatBank's LC deposit and FC senior unsecured debt ratings to Ca from Caa3, with a negative outlook, reflects the acute downside pressure on the bank's liquidity and capitalisation. The bank has to repay $200 million of senior unsecured bonds in September 2015. Although these bonds amount to only about 3% of the bank's total assets as of year-end 2014, the restructuring of Ukraine's government debt, coupled with the country's limited access to foreign exchange, may prompt PrivatBank to restructure these obligations as it confronts severe asset quality, capital and liquidity pressures.
The downgrade of the bank's FC subordinated debt rating to C from Ca is driven by the downgrade of the bank's standalone BCA to ca from caa3 and the structural subordination of these instruments which points to higher severity of losses than for senior debt in a default scenario.
The bank's FC deposit rating is affirmed at Ca, having been constrained previously at that level by the country's FC deposit ceiling of Ca.
The downgrade of PrivatBank's LC deposit and FC senior unsecured debt ratings to Ca from Caa3, with a negative outlook, reflects the acute downside pressure on the bank's liquidity and capitalisation. The bank has to repay $200 million of senior unsecured bonds in September 2015. Although these bonds amount to only about 3% of the bank's total assets as of year-end 2014, the restructuring of Ukraine's government debt, coupled with the country's limited access to foreign exchange, may prompt PrivatBank to restructure these obligations as it confronts severe asset quality, capital and liquidity pressures.
The downgrade of the bank's FC subordinated debt rating to C from Ca is driven by the downgrade of the bank's standalone BCA to ca from caa3 and the structural subordination of these instruments which points to higher severity of losses than for senior debt in a default scenario.
The bank's FC deposit rating is affirmed at Ca, having been constrained previously at that level by the country's FC deposit ceiling of Ca.