Tashkent, Uzbekistan (UzDaily.com) -- Fitch Ratings has assigned Ipoteka-Bank’s (Ipoteka) upcoming issue of U.S. dollar-denominated senior unsecured Eurobonds an expected long-term rating of ‘BB-(EXP)’.

The issue size is expected to be about US$300 million, while the interest rate and the tenor are yet to be determined. Ipoteka plans to use the proceeds from this bond to finance its foreign-currency lending portfolio.

The final rating is contingent upon the receipt of final documents conforming to information already received.

The expected rating is in line with Ipoteka’s Long-Term Issuer Default Rating (IDR) of ‘BB-’, as the notes will represent unconditional, senior unsecured obligations of the bank, which rank pari passu with its other senior unsecured obligations.

The ‘BB-’ IDR of Ipoteka is driven by Fitch’s view of a moderate probability of support from the government of Uzbekistan (BB-/Stable). This view considers Uzbekistan’s moderate ability to provide support as well as a high propensity to support Ipoteka based on its majority state ownership, as well as the potentially low cost of support relative to the sovereign’s foreign-currency reserves, and a record of support for the country’s public-sector banks that dominate the banking sector.

The bond draft documentation includes a change-of-status clause, under which bondholders will have an option to redeem the notes at par if Ipoteka’s ratings are downgraded or withdrawn as a result of the state ceasing to control the bank directly and indirectly (i.e. the share of the state declines below 50% +1 share).