Fitch Affirms Bulgarian Development Bank at 'BBB-'
A file photo dated 08 December 2011 shows an exterior view of the offices of Fitch Ratings in New York, New York, USA.
Fitch rating agency has affirmed the Bulgarian Development Bank's long-term issuer default rating at 'BBB-' on the back of lack of changes in the Bulgarian sovereign's ratings or the bank's ownership and role.
The outlook on the long-term IDR is stable.
Bulgarian sovereign's ratings is currently at 'BBB-'/Stable.
The bank's ratings are underpinned by the high probability of support from the Bulgarian state, if needed, the rating agency said in an official statement.
This view is based on the bank's 99.99% state ownership and its core mandate as an instrument of government developmental policy.
They also reflect the bank's relatively small size and track-record of operating with low leverage, and hence the small size of any potential support, if required, from the sovereign.
The Bulgarian Development Bank (BDB) AD is the successor of Encouragement Bank set up in 1999. The latter was transformed into a development bank after the adoption of a special law by the Parliament of Bulgaria in April 2008.
BDB is a small development bank, whose mandate is to provide loan financing to domestic SMEs, either directly, or through the provision of wholesale earmarked funding through local commercial banks.
36% of the bank's total funding was either guaranteed by the state or provided by the government itself at end-H112.
The bank also acts as the preferred agent for various government lending programs, including the assimilation of EU funds. The bank has two wholly-owned subsidiaries, the National Guarantee Fund and the JOBS Microfinance Institution.
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