OREANDA-NEWS. On 16 April 2009 Credit-Rating, a nationally recognized credit rating agency in Ukraine announced that it downgraded to uaBB- (uaBB minus) from uaBBB- (uaBBB minus) the long-term credit rating assigned to Lviv-based SKB Dnister OJSC (`bank`) and its registered coupon bonds (series G) for the amount of UAH40m, due Jan. 8, 2013. The outlook on the rating is negative. To revise the rating Credit-Rating considered bank`s financial statements for 2007-2008 and its other inside information.

An obligor or a debt liability with uaBB credit rating is characterized with the LOWER THAN SUFFICIENT creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is strongly affected by adverse changes in commercial, financial and economic conditions. A plus "+" and a minus "-" signs indicate intermediary categories compared to the standard categories (grades).

Negative outlook indicates that there is a possibility to downgrade the rating in the course of the year, on condition that negative tendencies are retained and current risks are realized.

Factors maintaining the credit rating

Bank`s sufficient profitability indicators.

Bank`s transparency and openness.

Factors constraining the credit rating

The bank`s assets and liabilities are poorly balanced by their due terms, combined with bank`s significant liquidity erosion, which has already prompted untimely meeting obligations by the bank.

Increased concentrations in the loan portfolio by principal borrowers (580% of 1st Tier capital account for 20 biggest borrowers as of Jan. 1, 2009), which may negatively affect bank`s liquidity and capitalization.

High concentrations of bank`s resources on major creditors coupled with dependency upon inter-bank market, which constrains bank`s financial flexibility.

Deteriorated quality of bank`s loan portfolio and low level of reserves on lending transactions, which may be insufficient for covering possible losses.

Poor bank`s capitalization.

Growing impact of external factors on the financial market and declined business activities, which negatively affects solvency of borrowers and bank`s financial indicators.