OREANDA-NEWS. On 11 February 2008 Credit-Rating, a nationally recognized credit rating agency in Ukraine downgraded to uaBB- (uaBB minus) from uaBBB- (uaBBB minus) the long-term credit rating assigned to Simferopol-based European Bank for Development and Savings OJSC ('Bank'). The rating remains on Rating Watch List with negative outlook.

An obligor or a debt liability with uaBB credit rating is characterized with the LOWER THAN SUFFICIENT creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is strongly affected by adverse changes in commercial, financial and economic conditions.

The Rating Watch List is intended for informing the financial market participants about possible changes of ratings in the short-term prospective. The rating placed on RWL denotes that Credit-Rating is currently considering its change as a result of events or ongoing trends, which may negatively affect creditworthiness of a rating's bearer.

The plus (+) or minus (-) modifier denotes ratings relative status within major categories .

Negative outlook indicates that there is a possibility to downgrade the rating in the course of the year, on condition that negative tendencies are retained and current risks are realized.

Factors prompting the ratings downgrade
The Bank failed to implement its strategy for 2007, which has also been aggravated by impact of external factors. All of that resulted in Bank's liquidity crisis in the period of 2007-end and 2008-beginning, and in eroded Bank's financial strength.
The issue of attraction of foreign investors to the Bank is still remains unsettled.
Bank's eroded financial strength; in fact the specific gravity of overdue and doubtful debts in Bank's loan portfolio exceeds 13 per cent as of Feb. 1, 2008, accompanied by high volume of Bank's overdue liabilities.
The growth in Bank's reputation risks may lead to squeeze in Bank's clientele and to aggravated payment discipline of certain obligors.

Further development of the situation is contingent on sale of Bank's control stock to foreign investors, namely Sabre Capital Worldwide and Dubai Financial Group, and on terms and conditions of the deal.