AKIPRESS.COM - Fitch Ratings has downgraded Kazakhstan's Alliance Bank JSC's Long-term Issuer Default Ratings to 'RD' (Restricted Default) from 'C' and Viability Rating (VR) to 'f' from 'c', the press service of the Fitch Group said on Monday. 

The downgrades reflect Fitch's view that the bank has experienced an uncured default on its senior debt obligations, following the failure to pay a coupon due on 25 March. Fitch understands that Alliance has no plans to make the outstanding payment during the 10-day grace period given the ruling of the financial court of Almaty on 3 March. This ruling authorised the restructuring of the bank's debt and ordered suspension of payments on these obligations.

In January 2014, the bank stated its intention to materially reduce its liabilities under its senior and subordinated debt obligations relative to original contractual terms in order to improve its capitalisation. Fitch therefore expects that implementation of the restructuring will involve a material reduction of terms relative to the original contractual terms, which Fitch classifies as a restricted default in accordance with its "Distressed Debt Exchange Criteria" The affirmation of the senior and subordinated debt at 'C' reflects the fact that these were already at the lowest level possible for instrument ratings.