S&P Global Ratings on Feb. 2 downgraded Kazakhstan-based JSC Delta Bank's long-term counterparty credit rating to CC from CCC- and its Kazakhstan national scale rating to "kzCC" from "kzCCC-".
The rating agency affirmed the bank's short-term counterparty credit rating at C. All ratings remain on CreditWatch with negative implications, where they have been since Jan. 23.
The ratings actions follow the bank's nonpayment of the 9.8 billion tenge principal on its senior unsecured bond that was due Jan. 18. The bank repaid the 469 million tenge coupon at the end of January and has a grace period of 10 business days from Feb. 1 to repay the principal of the bond, but S&P believes the bank's current liquid assets are not sufficient to repay the bond in full.
Delta Bank requested support from the National Bank of the Republic of Kazakhstan, but such support is contingent on a liquidity injection from the lender's owner. S&P considers it unlikely that the support from both the bank's owner and the central bank will come within the grace period, leading to an increased probability of Delta Bank defaulting on its bond.
As of Feb. 2, US$1 was equivalent to 325.33 Kazakhstan tenge.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.