Moody's rates Halyk Bank note Baa1

Moody's Investors Service said it assigned a long-term Baa1 rating to the senior unsecured foreign-currency notes expected to be issued by HSBK (Europe) BV, a special-purpose company wholly owned by Halyk Bank. The issue will be unconditionally and irrevocably guaranteed by Halyk Bank, which is the ultimate obligor under the transaction. The amount will be determined by market conditions, and the tenor is likely to be seven to ten years.

The outlook for the rating is stable.

According to the terms and conditions of the notes, Halyk Bank must comply with a number of covenants such as negative pledge, limitations on mergers and consolidation, limitation on certain transactions and limitation on payment of dividends, among others. Moody's said that, while the likelihood that any of these covenants being breached is relatively low, any such occurrence could potentially have adverse liquidity implications for the bank and might exert downward pressure on its ratings.

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