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S&P, Moody's assign preliminary ratings to Georgia Capital over planned demerger

S&P Global Ratings and Moody's on Feb. 21 assigned JSC Georgia Capital preliminary ratings in light of the company's planned demerger from U.K.-based BGEO Group Plc.

S&P assigned the company a B+ preliminary long-term corporate credit rating, while Moody's assigned a B2 corporate family rating and a B2-PD probability of default rating to the investment firm. The outlooks on the ratings are stable.

The ratings are based on the expected successful completion of the demerger, with S&P saying it would take into account the review of all final transaction documentation for the final ratings.

The stable outlook reflects S&P's view that Georgia Capital will actively manage its loan-to-value ratio so that it remains below 30% during the next 12 months. Moody's view is that the company will continue to sustain a market-value leverage of around 35% during the market cycle and an interest cover of around 2x.

BGEO Group will demerge into a banking business under Bank of Georgia Group Plc and an investment business under BGEO Investments, now Georgia Capital Plc. Both Georgia Capital and Bank of Georgia are set for a London listing in the summer.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.