site.btaFitch Affirms Bulgarian Development Bank at 'BBB-'; Outlook Stable

Fitch Affirms Bulgarian Development Bank at 'BBB-'; Outlook Stable


Sofia, March 9 (BTA) - Fitch Ratings has affirmed Bulgarian
Development Bank's (BDB) Long-term Issuer Default Rating (IDR)
and Support Rating Floor at 'BBB-', Short-term Issuer Default
Rating (IDR) at 'F3' and Support Rating at '2'. The Outlook on
the Long-term IDR is Stable, Fitch Ratings said on its website.

The rating action follows a peer review of European development
banks.

BDB's IDRs and Support Rating Floor are equalised with those of
the Bulgarian sovereign (BBB-/Stable). These ratings, as well as
the Support Rating, reflect Fitch's opinion that there is a
high probability of support for the bank from the Bulgarian
sovereign, if required, due to the bank's policy role, its 99.99
per cent state ownership, its funding structure, and its small
size. Fitch views both the State's propensity and ability to
support the bank as strong, which mitigates the lack of explicit
state guarantee on BDB's liabilities. Still, the BDB Act gives
the State the ability to provide a guarantee on BDB's
liabilities on a case-by-case basis for bonds and loans with
maturities over one year.

BDB's activities have tended to be linked to government or
EU-led development programmes. Fitch Ratings stresses the Bank's
plan to issue a government-guaranteed bond of up to 500 million
euro in 2015, which will finance the government's energy
efficiency programme. Under the programme, repayment of the
loans provided to households will be coming directly from the
State, so BDB will effectively act as an administrator of the
programme.