UGB's $1bn EMTN notes get negative outlook
Limassol, February 2, 2010
Moody's has given Baa3 and Ba1 ratings to Bahrain-based United Gulf Bank's (UGB) senior unsecured and subordinated notes to be issued under $1 billion Euro Medium-Term Note (EMTN) Programme. The ratings of the notes carry a negative outlook.
Moody's pointed out that the terms and conditions of the EMTN programme include a step-up event trigger, which is activated if the bank's senior ratings are downgraded below Baa3.
'Activation of this trigger results in a 1.25 per cent step-up in the interest rate payable,' the ratings agency said in a statement.
According to Moody's, UGB is rated at Baa3 (negative outlook) for deposits, based on its D+ bank financial strength rating (BFSR) that maps to a Ba1 baseline credit assessment.
Additionally, UGB's Baa3 rating incorporates a one-notch uplift reflecting an assessment of a moderate likelihood of support from Kipco, the bank's controlling shareholder.
Moody's previous rating action on UGB was implemented on September 1, 2009 when the rating agency confirmed the bank's Baa3/Prime-3/D+ ratings with a negative outlook.
Headquartered in Manama, UGB reported total assets of $2.47 billion at the end of June 2009.-TradeArabia News Service