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Moody's acts on Promsvyazbank after Russian central bank rescue

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Moody's acts on Promsvyazbank after Russian central bank rescue

Moody's on Dec. 20 confirmed PAO Promsvyazbank's B2 long-term foreign and local-currency senior unsecured debt and deposit ratings and downgraded its baseline and adjusted baseline credit assessments to "ca" from "caa1".

The outlook on the long-term ratings was changed to developing from rating under review.

The rating agency also affirmed the bank's Not Prime short-term deposit rating and Not Prime(cr) short-term counterparty risk assessment.

The action comes after the bank was taken by the Central Bank of the Russian Federation under temporary administration, acting as key investor through the country's Banking Sector Consolidation Fund, or BSCF. Moody's said the central bank's takeover indicates that the support it will give the lender is necessary for the bank to continue operating and avoid default. The "ca" baseline credit assessment also shows Promsvyazbank's inability to continue a stand-alone operation, according to the agency.

The agency said the developing outlook on the lender's long-term debt and deposit ratings reflects both upward and downward ratings pressures as the central bank and the BSCF conduct their due diligence and possible restructuring of the lender.