OREANDA-NEWS. On June 20, 2007 the International Bank of Azerbaijan has held the briefing on issuance by bank of debut Eurobonds, reported the press-centre of IBA.

"For the purposes of diversification of funding sources and attraction of long-term financial resources via public allocation of its liability securities with one of the internationally recognized exchanges, IBA board has made the decision on October 25, 2006 to issue the debut Eurobonds for the value of around 200 mln. Dollars USA", - Vagif Akbarov, Deputy Chairman of IBA Board said to journalists.

To implement the above decision, within the preparatory scope of work, the tender was held to select the lead-managers of Eurobonds, based on criteria of optimal marketing strategy of the forthcoming issue, forecasted profits assessment, proposed investor base, underwriting costs, legal and transaction costs, previous lead-manager experience, as well as secondary market liquidity capabilities. As a result of thorough assessment performed via comparison of tenders for above criteria from among 14 major banks tendering "JPMorgan" and "Citigroup" have been selected the lead managers.

IBA Eurobonds will be issued in "Reg S" format. Term of the bond - 3-5 years. Proposed commencement of issuance – early November 2007. Attracted funds will be used to fund the priority projects in various sectors of national economy. At this time the IBA approves the text of mandate letter to lead managers. Afterwards it is planned to appoint international and national lawyers, approval and distribution of participant lists and schedules.

Besides, IBA is struggling to obtain the Moody's Investors Services and Fitch Ratings international rating agencies’ assessment of its rating to the level of independent rating of the country (Fineko/abc.az.). As VAgif Akbarov informed, on June 27 will commence the negotiations to assess the banks rating with Fitch Ratings, and later with Moody's.

"Managers for organization of the initial issue of IBA Eurobonds, Citigroup and JP Morgan think that balancing of bank’s rating to independent rating is possible. Meanwhile the agencies do not go for it, and assess the bank’s rating one level lower than independent. In their opinion, the reason is in the virtual default rating, as government support to the bank is unknown. Meanwhile the IBA is a system formation bank and support will be unconditional ", - said V. Akbarov.

According to Moody's Investors Services, the long-term rating of the bank in foreign currency is at Ba2, and short term is at NP. For national currency the long-term is announced at Baa2 and short-term atP-2. Financial Support Rating (FSR) is stated at the level E+. Rating change forecast is stable. According to Fitch, IDR in national and foreign currency is improved from "BB-" to "BB". In this the rating of support is confirmed at level "3", short-term rating at level "B", and individual rating at level "D/E". Rating change forecast is stable.

Moody"s Investors Services have assigned to IBA the support level for national and international currency at level Ba1 on September 14, 2006. At the same time, the maximum rating on bonds and notes of Azerbaijan in foreign currency is assessed at level Baa2/P-2, which is the reaction for mid-term default risks of the government. Moody’s has assessed the rating of bank deposits in foreign currency at the level of Ba2/NP, and in national currency at Baa1/P-2. National currency exchange rate had the best assessment at A3.

The Fitch Ratings international rating agency on February 6 has increased the rating of IDRs for Azerbaijan in national and foreign currency from "BB+" to "BB". The rating change forecast is stable. Upper rating is also improved to "BB+" from "BB", but retained at "B" for short-term operations in foreign currency.