Fitch Rates National Bank of Uzbekistan’s Debut Eurobond ‘BB-(EXP)’
Tashkent, Uzbekistan (UzDaily.com) – Fitch Ratings has assigned National Bank for Foreign Economic Activity of the Republic of Uzbekistan’s (NBU) upcoming issue of the US dollar-denominated senior unsecured Eurobonds an expected long-term ‘BB-(EXP)’ rating.
The issue size and interest rate are yet to be determined, while the tenor is expected to be five years. NBU plans to use the proceeds from this bond for financing of its foreign-currency lending portfolio.
The final rating is contingent upon the receipt of final documents conforming to information already received.
The expected rating is in line with NBU’s Long-Term Issuer Default Rating (IDR) of ‘BB-’, as the notes will represent unconditional, senior unsecured obligations of the bank, which rank pari passu with its other senior unsecured obligations.
NBU’s ‘BB-’ IDR is driven by the Fitch’s view of a moderate probability of support from the government of Uzbekistan (BB-/Stable). This view is based on NBU’s high systemic importance, as reflected by its largest share of banking system assets (25% at end-2019) and NBU being the only bank designated as a domestic systemically important bank by the Central Bank of Uzbekistan, and its full state ownership.
The bond draft documentation includes the change of control clause, under which bondholders will have an option to redeem the notes at par if the state reduces its shareholding (direct and indirect) in NBU below 50% +1 share.