OREANDA-NEWS. October 18, 2011. Moody's Investors Service has downgraded ATF Bank's long-term local and foreign-currency deposit ratings to Ba3 from Ba2, its foreign-currency senior unsecured debt rating to Ba3 from Ba2 and foreign-currency junior subordinated debt rating to B2 from B1. Moody's has also assigned a negative outlook to the bank's deposit and debt ratings. ATF Bank's E+ standalone bank financial strength rating (BFSR) - which maps to B3 on the long-term rating scale – is unaffected by this and continues to carry a stable outlook, reported the press-centre of KASE.

Today's rating actions conclude the review for downgrade of ATF's ratings, implemented on 14 June 2011.

RATINGS RATIONALE

The decision to downgrade the bank's ratings is triggered by (i) Moody's downgrade of UniCredit's ratings on 5 October 2011 (UniCredit is ATF Bank's ultimate parent); and (ii) Moody's reassessment of parental support probability extended to ATF Bank, from UniCredit. "We have lowered our assumption of parental support probability for ATF Bank's ratings to moderate from high, as we consider that the subsidiary's strategic importance for UniCredit has  diminished," explains Armen Dallakyan, a Moody's Assistant Vice President and lead analyst for ATF Bank. "Consequently, ATF Bank's deposit and senior unsecured debt ratings now receive three-notches of rating uplift from the bank's standalone credit strength of B3," adds Mr Dallakyan.

Moody's has also removed the low systemic support probability for ATF Bank, which however has not had any rating impact. The rating agency believes that the only external support provider for the bank is likely to be UniCredit.

As reflected in the negative outlook, the bank's deposit and debt ratings may be further downgraded if UniCredit's ratings are downgraded, or if Moody's revises downwards its assumption of moderate parental support. ATF Bank's ratings are also likely to be downgraded if the bank's BFSR is downgraded.