Fitch might downgrade Forum

Fitch Ratings said it placed Forum Bank's ratings on Rating Watch negative including its B long-term foreign-currency issuer default rating, B+ long-term local-currency issuer default rating, B short-term foreign-currency issuer default rating, 4 support rating, AA+(ukr) national long-term rating and AA+(urk) senior debt rating. The viability rating was affirmed at cc.

The rating action follows the recent announcement that Smart Holding will acquire a 96% stake in Forum from its current shareholder, Commerzbank AG (A+/stable). Fitch said it expects to resolve the Rating Watch negative and downgrade Forum's long-term issuer default ratings in the near-term, i.e. prior to completion of the sale, to reflect the reduced probability of external support for the bank from the new shareholder.

The long-term issuer default rating could be downgraded to CC if Fitch believes that the acquisition is unlikely to benefit the bank's standalone profile. However, the agency said the downgrade might be slightly less severe if it understands that the transfer of ownership is likely to result in improved prospects for work-outs and recoveries of some of the bank's problem assets or if the new owner supports Forum's funding and liquidity profile.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.