Fitch rates Alfa Bank note B+

Fitch Ratings said it assigned a long-term B+ rating to Alfa Bond Issuance plc's $300 million issue of 8.635% limited recourse loan participation notes due 2017, which will be used solely for financing a subordinated loan to Alfa Bank. The interest rate of the notes is fixed, with a 150 basis points step-up in the margin over the U.S. Treasury rate after five years

The bank has a BB- issuer default outlook, B short-term rating, 4 support rating, C/D individual rating, A+(rus) national long-term rating and positive outlook.

The agency said Alfa Bond Issuance will only pay noteholders amounts (principal and interest), if any, received from Alfa Bank under the loan agreement. The issuer's claims in relation to repayment of the subordinated loan will be junior to those of Alfa Bank's senior creditors but will rank at least equally with the claims of other subordinated creditors of the bank. Additionally, the bank will have the right to prepay the subordinated loan after five years or at any time if the subordinated loan does not qualify as regulatory capital.

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