Moody's rates Turkiye Garanti note Baa1

Moody's Investors Service said it assigned a provisional Baa1 rating to T2 Capital Finance Co. AS' step-up callable subordinated notes due 2017, the proceeds of which will be lent to Turkiye Garanti Bankasi AS.

The agency said the Baa1 rating is considerably higher than the Ba1 foreign-currency debt ceiling of the Republic of Turkey and is based primarily on the ability and willingness of Turkiye Garanti, which has a foreign-currency deposit rating of B1, to make scheduled payments on a subordinated basis to T2 Capital; on the inconvertibility and non-transferability insurance policy provided by Steadfast Insurance Co. that, together with moneys deposited in an offshore reserve account, are available to make scheduled interest payments on the notes during a maximum period of 24 months if an event of inconvertibility or non-transferability occurs that prevents Garanti from making scheduled debt service payments on the loan it obtains from T2 Capital; and on the structural and legal features of the transaction.

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