November 14, 2012 / 5:13 PM / 5 years ago

TEXT-Fitch affirms Bulgarian Development Bank at 'BBB-'

Nov 14 - Fitch Ratings has affirmed the Bulgarian Development Bank's
Long-Term Issuer Default Rating (IDR) at 'BBB-', Short-term IDR at 'F3', Support
Rating at '2', and a Support Rating Floor at 'BBB-'. The Outlook on the
Long-Term IDR is Stable.

RATING ACTION RATIONALE
The affirmation reflects that there have been no changes in the Bulgarian
sovereign's ratings ('BBB-'/Stable), or in BDB's ownership and role, since
Fitch's last rating review.

RATING DRIVERS
The bank's ratings are underpinned by the high probability of support from the
Bulgarian state, if needed. 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.

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 covered by a Letter of Comfort) or provided
by the government itself at end-H112.

RATING SENSITIVITIES
Any change in the ability or willingness of the state to support BDB could lead
to a change in the bank's ratings. This could arise through any sovereign rating
action on Bulgaria. A major change of ownership or policy role could also result
in a downgrade of BDB, but Fitch views this as very unlikely as present.

The rating actions are as follows:

Long-term IDR affirmed at 'BBB-'; Outlook Stable
Short-term IDR affirmed at 'F3'
Support Rating of '2'
Support Rating Floor of 'BBB-'

Additional information is available on www.fitchratings.com. The ratings above
were solicited by, or on behalf of, the issuer, and therefore, Fitch has been
compensated for the provision of the ratings.

Applicable criteria, 'Global Financial Institutions Rating Criteria' dated 15
August 2012 are available at www.fitchratings.com.

Applicable Criteria and Related Research:
Global Financial Institutions Rating Criteria

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