Russian Bank Rtgs Cut To 'CCC'; On S&PWatch Neg.NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 8/13/98-- Standard & Poor's today lowered its long-term counterparty credit ratings on six Russian banks Noun 1. Russian bank - solitaire with two players using separate packs crapette patience, solitaire - a card game played by one person , listed below, and placed them on CreditWatch with negative implications. The short-term counterparty credit ratings of Rossiyskiy Kredit Bank and Aljba Alliance are affirmed at single-'C'. The long-term counterparty credit rating of Bank Imperial has been revised to Not Meaningful (N.M.). The rating changes reflect the precipitous deterioration of market conditions in Russia, owing to owing to prep. Because of; on account of: I couldn't attend, owing to illness. owing to prep → debido a, por causa de a severe confidence crisis, and the drying up of liquidity sources of the Russian banks which has led to a spate of nonpayments by several Russian banks. The secondary market in short-term government bonds (GKO) has all but disappeared except for the shortest dates, making the market value of the banks' government bond portfolios impossible to discern. No transactions are being concluded on the interbank market Interbank market Financial institutions exchange of currencies between and among themselves. . Deprived of these obvious sources of liquidity, the risk of nonpayment for the banks has increased, although Standard & Poor's understands that the Central Bank's liquidity facilities (such as overnight, Lombard loans and repurchases) are still available. SBS-AGRO and a handful of other Russian banks are reportedly having problems meeting margin calls on U.S. dollar denominated Russian government debt. Standard & Poor's will closely monitor the situation. In addition, forward foreign exchange contracts will be due August 17. Yet with the imposition of stricter controls on banks' currency operations on August 12, which was intended to quell quell tr.v. quelled, quell·ing, quells 1. To put down forcibly; suppress: Police quelled the riot. 2. speculation against the Russian rouble ROUBLE. The name of a coin. The rouble of Russia, as money of account, is deemed and taken at the custom-house, to be of the value of seventy-five cents. Act March 3, 1843. , banks are finding hard currency much more difficult to obtain. As a result, Standard & Poor's assessment is that the banking system is in a parlous situation, with a high risk of a domino effect in nonpayment. Thus, delays in payments by rated banks, for example, on margin calls on repurchase transactions or forwards, cannot be ruled out in the coming days. Looking further ahead, if market conditions do not improve, repayment of syndicated loans Syndicated Loan A very large loan in which a group of banks work together to provide funds for one borrower. There is usually one lead bank that takes a small percentage of the loan and syndicates the rest to other banks. Notes: Also known as a "syndicated bank facility. is also in jeopardy. This is the reason for the downgrading downgrading A reduction in the quality rating of a security issue, generally a bond. A downgrading may occur for various reasons including a period of losses, or increased debt service required by restructuring a firm's capital to include more debt and less of all rated banks and why the banks are placed on CreditWatch with negative implications. During the recent crisis, Alfa Bank Alfa Bank, the corporate treasury of the Alfa Group, is the largest private commercial bank in Russia. Its headquarters are in Moscow, Kalanchevskaya street. Today it is a high technological universal financial institution, providing service for more than 1. , Aljba Alliance and Vozrozhdenie Bank have consistently managed their liquidity positions in a nimble nim·ble adj. nim·bler, nim·blest 1. Quick, light, or agile in movement or action; deft: nimble fingers. See Synonyms at dexterous. 2. manner, Alfa Bank and Aljba Alliance by maintaining excess funds with the Central Bank or with western correspondents and Vozrozhdenie Bank as a result of its stable deposit base. Standard & Poor's believes that, in a deteriorating environment, banks whose liquidity management is superior and who have consistently maintained high levels of liquidity are less likely to be vulnerable. Nevertheless, the systemic risk Systemic Risk Risk common to a particular sector or country. Often refers to a risk resulting from a particular "system" that is in place, such as the regulator framework for monitoring of financial_institutions. will remain an issue for all banks. The banks' creditworthiness Creditworthiness The condition in which the risk of default on a debt obligation by that entity is deemed low. Creditworthiness Eligibility of an individual or firm to borrow money. is also impeded by their small size. The changed rating of Bank Imperial to N.M. follows its reported defaulted payments and tomorrow's anticipated default on its euro-syndicated loan. OAO OAO Orbiting Astronomical Observatory OAO Over and Out OAO One And Only OAO Ontario Association of Orthodontists OAO Owned and Operated OAO Ontario Association of Optometrists OAO Opticians Association of Ohio OAO Orthogonalized Atomic Orbital Lukoil, which recently became Bank Imperial's majority shareholder, has not made liquidity support available to the bank in a timely fashion and the bank has accordingly defaulted on several of its obligations, Standard & Poor's said. -- CreditWire -0-
ISSUER CREDIT RATINGS TO FROM
Alfa Bank
Counterparty credit rtg CCC/Watch Neg/-- B-/Negative/--
Aljba Alliance/Rossiyskiy Kredit Bank
Counterparty credit rtg CCC/Watch Neg/C B-/Negative/C
Bank Imperial
Counterparty credit rtg N.M. B/Stable/--
Inkombank (AB)/SBS-AGRO Bank/Vozrozhdenie Bank
Counterparty credit rtg CCC/Watch Neg/-- B/Negative/--
REVISED RATINGS TO FROM
Alfa Russia Finance B.V.
Sr unsecd debt
(Gtd. Alfa Bank) CCC/Watch Neg B-
Med-trm nts prog
(Gtd. Alfa Bank) CCC/Watch Neg B-
Rossiyskiy Kredit Bank
Bank loan rtg CCC/Watch Neg B-
Rossiyskiy Kredit Securities B.V.
Sr unsecd debt
(Gtd. Rossiyskiy Kredit Bank) CCC/Watch Neg B-
Med-trm nts prog
(Gtd. Rossiyskiy Kredit Bank) CCC/Watch Neg B-
SBS-AGRO Bank
Bank loan rtg CCC/Watch Neg B
SBS-Agro Finance B.V.
Sr unsecd Foreign currency
(Gtd. SBS-AGRO Bank) CCC/Watch Neg B
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