Fitch rates Alfa Bank Kazakhstan bonds B+

Fitch Ratings said it assigned an expected long-term local-currency rating of B+ to JSC SB Alfa Bank Kazakhstan's 4.5 billion in Kazakhstani tenge series 2 senior unsecured bonds, along with a national long-term rating of BBB(kaz) with a recovery rating of RR4.

The final ratings are contingent on the receipt of final documentation conforming to information already received, Fitch said.

The issue of series 2 bonds is anticipated in the third quarter of 2013, the agency said. The bonds would carry a fixed semi-annual coupon of 7% with no step-up and would have a maturity date in five years from the issuance date. No put option is envisaged, the agency said.

The bonds would rank pari passu with other senior unsecured obligations of the bank except for the individuals' deposits, Fitch said.

The ratings reflect the bank's small franchise, high single-name concentrations, significant growth in a relatively high-risk environment and some uncertainty due to potential new bank acquisitions, the agency said.

The ratings also consider the solid performance helped by low average funding costs, reasonably strong reported asset quality metrics, sound liquidity and funding position and solid capitalization, Fitch said.

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