Fitch puts Spurt Bank on watch

Fitch Ratings said it placed Spurt Bank's B- long-term foreign-currency issuer default rating, B short-term foreign-currency issuer default rating, 5 support rating and D/E individual rating on Rating Watch negative.

The agency said the Rating Watch reflects its concerns over the bank's liquidity position in light of an upcoming bond redemption and recent deposit instability. An early redemption option embedded in Spurt's RUR 1 billion domestic bond falls on Dec. 4, and Fitch said the bank's current liquid assets only marginally exceed that amount.

To improve its liquidity position, Spurt needs to stabilize its deposit base and attract new wholesale funding, Fitch said. The bank is negotiating a credit facility from shareholder the European Bank for Reconstruction and Development that could be at least RUB 270 million and may be received in November.

The agency said that if the bank is successful in stabilizing its deposit base, attracting new wholesale funding and maintaining a reasonable liquidity cushion after the early redemption option, then the Rating Watch may be removed and the ratings affirmed. If the liquidity position tightens further, then the ratings may be downgraded.

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