Standard & Poor’s Ratings Services has assigned its ‘B’ senior unsecured debt rating to the proposed loan participation notes to be issued by Citigroup Global Markets Deutschland AG on a limited recourse basis for the sole purpose of financing a loan to Russian Standard Bank ZAO. The exact amount and maturity of the notes will be specified during the placement. The rating on the loan participation notes is fully based on the long-term counterparty credit rating on Russian Standard.
The ratings on Russian Standard reflect the bank’s improving profitability, geographical diversification of business, and wider funding resources. The bank’s leading position in the nascent Russian consumer finance market, successful business model, and improving financial profile also support the ratings. Nevertheless, the ratings are constrained by the high risks of operating in the fast-growing and untested Russian consumer finance market, the bank’s relatively short operating history, and its high dependence on wholesale funding.