Moody's rates Bank Finance and Credit note B2

Moody's Investors Service said it assigned a B2 long-term foreign-currency debt rating to the loan participation notes to be issued on a limited recourse basis by special purpose vehicle Finance & Credit Ukraine BV for the sole purpose of funding a loan from Moscow Narodny Bank Ltd. (Baa2/Prime-2/D+) to Ukrainian Bank Finance and Credit Ltd. (B2/Not-Prime/E+).

The outlook is stable.

The rating is based on the fundamental credit quality of Ukraine-based Bank Finance and Credit as an underlying borrower, Moody's said. The loan to the bank, which is the only source of repayment for the notes, will rank at least pari passu with the claims of all of Bank Finance and Credit's other unsecured creditors except claims that are preferred by bankruptcy, the agency said.

Moody's cautioned that the transaction has an embedded rating trigger whereby the notes will become payable if during the three months after the occurrence of any reorganization, corporate reconstruction or change of control of the bank, its ratings are downgraded by one or more notches or are placed on review for possible downgrade.

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