Fitch downgrades ATF Bank

Fitch Ratings said it downgraded ATF Bank JSC's long-term foreign- and local-currency issuer default ratings to BBB- from BBB, national long-term rating to AA(kaz) from AA+(kaz), senior unsecured debt rating to BBB- from BBB, national senior unsecured debt rating to AA(kaz) from AA+(kaz), subordinated debt rating to BB+ from BBB-, national subordinated debt to AA-(kaz) from AA(kaz) and perpetual subordinated notes to B+ from BB-.

All of the ratings also were placed on Rating Watch negative.

The downgraded were driven by the recent downgrade of ATF's ultimate parent bank Unicredit SpA to BBB+, Fitch said.

The negative watch follows news that Unicredit has signed an agreement for the disposal of its 99.75% share in ATF Bank, the agency said, and reclassified the bank as an asset held for sale.

The prospective buyer, KazNitrogenGaz LLP, is fully owned by local businessman Galimzhan Esenov and also holds majority stakes in two small Kazakh insurance companies.

Unicredit expects the sale to be completed by the end of April subject to approval by the National Bank of Kazakhstan, the agency said.

Fitch said it will resolve the negative watch following completion of the sale and a review of ATF's standalone profile, which drives its viability rating of B-.

Following the resolution of the watch, the agency said it expects that ATF's long-term issuer default rating will probably be aligned with its viability rating, given the more limited reliability of support from the new shareholder and significant uncertainty concerning the readiness of the Kazakh authorities to provide support, even to systemically important domestic banks.

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