OREANDA-NEWS. Fitch Ratings-London/Moscow-28 December 2006: Fitch Ratings has today revised Russia-based Housing Finance Bank's ("HFB") Issuer Default rating ("IDR") to 'CCC' from 'CCC+', following the changes to its rating scale in 2006, and in particular the elimination of '+' and '-' suffixes from IDRs in the 'CCC' range.

The Short-term 'C', Individual 'D/E', Support '5' and National Long-term 'B+(rus)' ratings are affirmed. The Outlooks on the IDR and National Long-term rating remain Stable.

The ratings of HFB reflect the bank's limited franchise and a high share of transactions with related parties, mainly companies from First Mortgage Company ("PIK"), a construction holding company owned by the bank's shareholders.

They also reflect the bank's significant loan concentrations, potentially vulnerable liquidity and profitability and a still challenging operating environment. However, they also consider the bank's relatively high capital ratios and adequate asset quality to date.