Fitch downgrades PrivatBank to the default

Fitch announced the downgrade of the long-term Issuer default rating in foreign currency PrivatBank “CCC” to “RD” (restricted default), writes “Business”.

The Agency noted that the basis for this decision was the statement of the national Bank on the participation of related and unsecured creditors in a Bank in recapitalization through the conversion of Bank liabilities into equity.

A rating of PrivatBank reflects including that state support was insufficient to prevent losses for creditors, and therefore it cannot be relied in the future.

“The last point, in turn, reflects the non-strategic nature of state ownership PrivatBank and limited the ability of authorities to provide support in foreign currency in case of need”, — the statement says Fitch.

We will remind, 19 – 21 December, the Deposit guarantee Fund increased the authorized capital of PrivatBank 29.4 billion UAH (to 50.7 billion) due to the forced conversion into shares of the Bank deposits of related parties and encumbered obligations PrivatBank before legal and physical persons who are not affiliated with the Bank.