The ‘Rating under revision: positive’ status has been assigned on the credit ratings of Home Credit & Finance Bank Limited Liability Company (hereinafter, the Bank) and its bonds in view of the anticipated acquisition of the Bank by PJSC Sovcombank (ACRA rating: AA-(RU), outlook Stable) after all regulatory approvals are obtained.
The current A(RU) credit rating of the Bank is based on its satisfactory business profile, strong capital adequacy position, adequate risk profile, and adequate liquidity and funding position. Support from the Bank’s shareholders has a limited positive impact on the rating.
The ‘Rating under revision: positive’ status reflects the need for additional information on the terms and conditions of the M&A transaction and a further analysis of the effects of the acquisition of the Bank by the entity with a higher creditworthiness, in particular, assessment of the support from the potential new owner, as well as factors of the standalone creditworthiness assessment (SCA), on the credit rating of the Bank and its bonds.
potential outlook or rating change factors
The ‘Rating under revision: positive’ status assumes that the rating may be upgraded.
Removal of the ‘Rating under revision: positive’ status and upgrade of the credit rating may be prompted by:
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Better assessment of the support from the new owner after it obtains control over the Bank;
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Positive effects of the change of the owner on the Bank’s (SCA).
Removal of the ‘Rating under revision: positive’ status and affirmation of the credit rating may be prompted by:
- No changes in the support and standalone creditworthiness assessments following the analysis of the transaction’s terms.
rating components
SCA: а-.
Support: SCA plus one notch.
issue ratings
Home Credit & Finance Bank Limited Liability Company, exchange-traded interest-bearing non-convertible uncertificated bond subject to centralized title registration, BO-07 series (ISIN RU000A102RF3), maturity date: February 6, 2026, issue volume: RUB 5 bln — A(RU).
Home Credit & Finance Bank Limited Liability Company, exchange-traded interest-bearing non-convertible uncertificated bond subject to centralized title registration, BO-04 series (ISIN RU000A103760), maturity date: June 1, 2026, issue volume: RUB 4 bln — A(RU).
Rationale. The issues represent senior unsecured debt of the Bank. Due to the absence of either structural or contractual subordination of the issues, ACRA regards them as equal to other existing and future unsecured and unsubordinated debt obligations of the Bank in terms of priority. According to ACRA’s methodology, the credit ratings of the issues are equivalent to that of the Bank, i.e. A(RU). The ‘Rating under revision: positive’ status has been assigned to the Bank’s credit rating; therefore, the ‘Rating under revision: positive’ status has been assigned to the bond issues listed above.
regulatory disclosure
The credit ratings have been assigned to Home Credit & Finance Bank Limited Liability Company and the bonds issued by Home Credit & Finance Bank Limited Liability Company (RU000A102RF3, RU000A103760) under the national scale for the Russian Federation based on the Methodology for Credit Ratings Assignment to Banks and Bank Groups under the National Scale for the Russian Federation, Methodology for Analyzing Rated Entities Associated with a State or a Group, and the Key Concepts Used by the Analytical Credit Rating Agency within the Scope of Its Rating Activities. The Methodology for Assigning Credit Ratings to Financial Instruments on the National Scale for the Russian Federation was also applied to assign the credit ratings to the above issues.
The credit rating of Home Credit & Finance Bank Limited Liability Company and the credit ratings of the bonds issued by Home Credit & Finance Bank Limited Liability Company (RU000A102RF3, RU000A103760) were published by ACRA for the first time on November 19, 2019, February 15, 2021, and June 7, 2021, respectively. The credit rating of Home Credit & Finance Bank Limited Liability Company and its outlook, and the credit ratings of the bonds issued by Home Credit & Finance Bank Limited Liability Company (RU000A102RF3, RU000A103760) are expected to be revised by October 20, 2024.
The credit ratings were assigned based on data provided by Home Credit & Finance Bank Limited Liability Company, information from publicly available sources, and ACRA’s own databases. The rating analysis was performed using the consolidated IFRS financial statements of Home Credit & Finance Bank Limited Liability Company and the financial statements of Home Credit & Finance Bank Limited Liability Company drawn up in compliance with Bank of Russia Ordinance No. 6406-U dated April 10, 2023. The credit ratings are solicited, and Home Credit & Finance Bank Limited Liability Company participated in their assignment.
In assigning the credit ratings, ACRA used only information, the quality and reliability of which were, in ACRA’s opinion, appropriate and sufficient to apply the methodologies.
ACRA provided no additional services to Home Credit & Finance Bank Limited Liability Company. No conflicts of interest were discovered in the course of credit rating assignment.
