Moody's drops Bank Soyuz to Caa1

Moody's Investors Service said it downgraded the senior unsecured foreign-currency debt rating of Bank Soyuz to Caa1 from B2 and put it on review for further downgrade.

The action continues the review that began on Oct. 9.

According to Moody's, the review continues to be affected by limited availability of data and the lack of transparency surrounding Soyuz's current condition.

Soyuz's financial fundamentals have deteriorated substantially during the fourth quarter of 2008, the agency said, with almost 40% reduction in the bank's customer funding, while reliance on interbank loans and loans provided by the Central Bank of Russia has increased significantly, to one-third of total non-equity funding.

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