OREANDA-NEWS. Fitch Ratings has upgraded Alternatifbank A.S.'s (ABank, BBB/Stable) US dollar-denominated guaranteed notes to 'A+' from 'A'.

The rating action follows the upgrade of Commercial Bank of Qatar (CBQ; A+/Stable), the guarantor of the notes (see 'Fitch Upgrades 7 Qatari Banks on Changed Support Assessment' dated 11 March 2015 at www.fitchratings.com).

KEY RATING DRIVERS
The notes benefit from an unconditional and irrevocable English law guarantee from ABank's 74.25% shareholder, CBQ. The rating of the notes is in line with CBQ's IDR to reflect Fitch's opinion that the guarantee ranks in line with unsecured and unsubordinated claims against CBQ and that CBQ intends and will be able to honour its commitments under the guarantee, if necessary.

Although the notes themselves represent claims against Turkey-domiciled ABank, their rating of 'A+' is above the Country Ceiling of 'BBB' of Turkey. This is because according to the agency agreement between ABank, CBQ and the Luxembourg branch of BNP Paribas Securities Services, any payments by CBQ under the guarantee are to be transferred directly into a New York City bank account as specified by BNP Paribas Securities Services in its capacity as fiscal agent. Consequently, cash flows under the guarantee are not subject to Turkish transfer and convertibility risks.

The terms and conditions of the notes include a number of events of default that could trigger claims under CBQ's guarantee, including payment default on the notes by the issuer, cross default of the issuer or guarantor, liquidation of (or similar action against) the issuer or guarantor and nationalisation of the issuer or guarantor.

ABank is a small bank operating in Turkey with 0.6% of total banking system assets at end-2014. It primarily focuses on SMEs.