OREANDA-NEWS. September 21, 2015. Fitch Ratings has downgraded PJSC CB PrivatBank's (Privat) Long-term foreign currency Issuer Default Rating (IDR) to 'RD' (Restricted Default) from 'C' on completion of the bank's USD200m eurobond restructuring. The Viability Rating (VR) has also been downgraded to 'f' from 'c' A full list of rating actions is available at the end of this rating action commentary.

KEY RATING DRIVERS
The downgrade of Privat's Long- and Short-term foreign currency IDRs to 'RD' and the bank's VR to 'f' follows the completion of the restructuring of its USD200m senior eurobond, which was due on 23 September 2015. The restructuring involved an extension of maturity, but no write-down of principal, and the coupon rate was increased. The new maturity of the senior bond will depend on progress with the restructuring of the bank's subordinated debt due in 2016 (not rated by Fitch).

In accordance with Fitch's distressed debt exchange (DDE) criteria, a DDE is deemed to have occurred if a restructuring imposes a material reduction in terms (including extension of maturity) compared with the original contractual terms of an entity's financial obligations, and the restructuring is conducted to avoid bankruptcy, insolvency or intervention proceedings, or a payment default. The downgrade of Privat's IDRs and the VR reflects Fitch's view that the bank's debt restructuring meets these criteria.

The bank's other ratings are not affected by the actions on the bank's foreign currency IDRs and VR. The rating of the restructured bond was already at the lowest possible level of 'C' prior to default.

RATING SENSITIVITIES
Fitch expects to review and upgrade the bank's VR, IDRs and debt ratings once sufficient information is available on the bank's post-restructuring credit profile. However, the ratings will likely remain very low, given high country risks and Ukraine's 'CCC' Country Ceiling.
The rating actions are as follows:

Long-term foreign-currency IDR: downgraded to 'RD' from 'C'
Short-term IDR: downgraded to 'RD' from 'C'
Viability Rating: downgraded to 'f' from 'c'

The bank's ratings which are not affected by the rating actions are:

Long-term local currency IDR: 'CCC'
Restructured senior unsecured USD200m eurobond of UK SPV Credit Finance plc: 'C'/Recovery Rating 'RR4'
Non-restructured senior unsecured USD175m eurobond of UK SPV Credit Finance plc due on 28 February 2018: 'CC'/Recovery Rating 'RR5'
Support Rating: '5'
Support Rating Floor: 'No Floor'
National Long-term rating: 'A-(ukr)', Outlook Stable