Standard & Poor’s Ratings Services has assigned its ‘A-‘ foreign currency senior unsecured debt rating to Czech Export Bank’s (CEB; foreign currency A-/Stable/A-2; local currency A+/Stable/A-1) upcoming US$150mn bond maturing on November 5, 2008.
“CEB is an integral part of the economic and export promotion policy of the Czech government,” says Standard & Poor’s credit analyst Kristel Richard. “As such, it is responsible for providing preferential medium and long-term loans to promote Czech exports, assisting Czech exporters in competing in foreign markets, and providing additional export financing services such as bank guarantees and short-term credit.”
The ratings on CEB are based on the unconditional and irrevocable guarantee extended by the Czech Republic (foreign currency A-/Stable/A-2; local currency A+/Stable/A-1) to CEB and its issues, and therefore reflect the ratings on the sovereign. The bank’s obligations are assumed for the purpose of providing preferential export financing and are, by law, guaranteed by the state.
The stable outlook on CEB reflects that on the Czech Republic. “It is expected that CEB will continue to play an important role in the Czech government’s economic development plans and policies,” Richard says. “This should enable the bank to maintain its public-law status and, therefore, its credit support from the sovereign’s guarantee.”