ArmInfo. Fitch Ratings has assigned Dilijan Finance B.V.'s USD300 million 6.5% senior unsecured notes due in 2025 a final long-term rating of 'B+' with a Recovery Rating of 'RR4'.
The assignment of the final rating follows the completion of the notes' issue and receipt of final documentation conforming to the information previously received. The final rating is the same as the expected rating assigned on 13 November 2019 (see ' Fitch Rates Ardshinbank's Upcoming Senior Unsecured Notes 'B+(EXP)'/'RR4'' at www.fitchratings.com).
The senior unsecured loan participation notes have been issued by Dilijan Finance B.V., the Netherlands-based special-purpose vehicle, for financing a loan to Armenian-based Ardshinbank CJSC (B+/Stable) for its general banking activity, including refinancing of upcoming contractual debt repayments. Dilijan Finance B.V. will only pay noteholders amounts (principal and interest) received from Ardshinbank under the loan agreement. Claims under the loan agreement will rank equally with the claims of other senior unsecured and unsubordinated creditors of Ardshinbank.
Key Rating Drivers
The senior unsecured notes are rated at the level of Ardshinbank's Long-Term Issuer Default Rating (IDR) of 'B+' and assume average recovery prospects for noteholders in case of default.
Ardshinbank's Long-Term IDR is driven by its intrinsic strength, as reflected by its 'b+' Viability Rating (VR). The bank's ratings reflect a volatile and highly dollarised local economic environment, which translates into potentially vulnerable asset quality. The VR also captures the bank's stable asset quality to date, supported by continued economic growth, reasonable capital and liquidity buffers and moderate profitability.
RATING SENSITIVITIES
The issue rating is sensitive to changes in Ardshinbank's Long-Term IDR and to Fitch's assessment of the recovery prospects in case of default.
An upgrade of Ardshinbank's IDR would require an improvement of the operating environment. An extended track record of stable asset-quality metrics and performance, and stronger capital ratios, would also be credit-positive. Conversely, material pressure on Ardshinbank's asset quality may lead to a downgrade of the bank's ratings, and hence of the issue's rating.