The international rating agency StandaS&P Global Ratings has affirmed its ‘D/D’ long- and short-term issuer credit ratings on Kazakhstan-based Delta Bank, the rating agency said in a message. At the same time, the agency affirmed the ‘D’ Kazakhstan national scale rating. S&P also affirmed its ‘D’ issue-level ratings on its senior unsecured bonds.
“The affirmation of the ratings reflects Delta Bank’s failure to repay some term deposits that were due in February and March,” S&P said.
The rating agency noted that although Delta Bank fully repaid (on February 22) 9.9 billion tenges (about $30 million) domestic senior unsecured bond it had defaulted on February 14, and also prepaid some other obligations, its liquidity position remained under pressure. These repayments were possible due to a 45.6 billion tenges loan the National Bank of Kazakhstan (NBK) provided to the bank for one month, which was then rolled over for another month. However, Delta Bank failed to pay approximately 10 billion tenges in corporate deposits due in February and March.
According to S&P, Delta Bank’s current liquid assets of about 6 billion tenges (about 1.5 % of total assets) as of March 30, are not sufficient to enable the bank to meet upcoming debt payments due. In April the bank needs to repay the loan from the NBK and liabilities under repurchase agreement transactions.
S&P will reassess Delta Bank’s creditworthiness and, if the bank fully repays all its overdue obligations and the agency has evidence that the bank has sufficient liquidity to meet its short and medium term payments, it will raise the ratings from ‘D’. (Trend/Business World Magazine)
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