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Moody’s has upgraded JSC Ukreximbank’s ratings

13 / 10 / 2020

Moody’s Investors Service ("Moody’s") has today upgraded the JSC Ukreximbank’s Baseline Credit Assessment (BCA) to caa1 from caa2 and subordinated debt rating to Caa1 from Caa2.

These rating actions, first of all, reflect Moody’s expectations that the JSC Ukreximbank’s loss absorption capacity will materially improve as a result of capital injections recently announced by the government. The bank’s capital is increased by UAH 6.8 billion in the form of domestic government bonds with a maturity of up to 15 years and an interest rate of up to 9.3%.

Under Moody’s estimates the JSC Ukreximbank’s shareholders equity will almost double as a result of the capital injection, and its TCE ratio (Tangible Common Equity % RWA) will increase to over 9% from around 5% at the end of June 2020. At the same time, Moody's notes in its release that the bank’s BCA remains constrained by a high reliance on market funding but emphasizes that the JSC Ukreximbank’s ample liquidity supported by a large buffer of liquid assets mainly in the form of government bonds mitigates refinancing risks.

Concurrently, Moody’s has affirmed the JSC Ukreximbank’s B3 local currency deposit rating, Caa1 long-term foreign currency deposit rating, and B3 senior unsecured debt rating. The outlook remains stable.