Fitch rates Locko-bank note B-

Fitch Ratings said it assigned an expected B- long-term rating with a recovery rating of RR4 to Locko Finance plc's upcoming issue of limited recourse loan participation notes, which will be used solely for financing a loan to Locko-bank (B-/stable/B).

Locko Finance will only pay noteholders principal and interest received from Locko-bank. The agency said Locko Finance will charge some of its rights and interests under the loan agreement to Deutsche Trustee Co. Ltd. for the benefit of noteholders under a trust deed, and Locko Finance's claims under the loan agreement will rank at least equally with those of other senior unsecured creditors of Locko-bank, save those whose claims are preferred by any bankruptcy, insolvency, liquidation or similar laws of general application.

Under Russian law, the claims of retail depositors rank above those of other senior unsecured creditors. At the end of September, retail deposits accounted for 23% of Locko-bank's total liabilities, Fitch said.

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