Review to be concluded after finalisation of debt restructuring

Moscow, November 03, 2009 -- Moody's Investors Service says that the review
with direction uncertain on the ratings of Bank Finance and Credit
(F&C) will be concluded when debt restructuring terms are finalised with the
bank's creditors. Moody's placed F&C's Caa2 debt and deposit ratings and
B3.ua National Scale Rating (NSR) on review with direction uncertain
following a downgrade to those levels on 24 March 2009. The downgrade was
driven by the bank's default on repayment of a US$70 million syndicated
loan.

Moody's ratings review is focusing on the outcome of the debt restructuring
negotiations being conducted by the bank with its creditors and the rating
agency expects to conclude the review shortly after both parties finalise an
agreement.

Moody's previously commented on the ratings review by indicating that it
will continue to focus on (i) F&C's liquidity position, (ii) the terms and
conditions of the debt restructuring proposed by the bank to its wholesale
creditors and (iii) the bank's ability to raise additional capital given
that it has declined to participate in the government's recapitalisation
programme.

In respect of liquidity, Moody's notes that, while there is no immediate
liquidity pressure from deposit outflows, F&C's liquidity position remains
weak and it continues to be highly dependent on funding from the National
Bank of Ukraine (NBU).

In terms of capitalisation, the rating agency observes that the bank
increased its Tier 1 capital by UAH400 million (around US$50 million) in
September 2009 via a capital injection from the existing shareholder and by
attracting US$7.94 million of subordinated debt. Moody's expects this
capital increase to be sufficient for the bank to comply with the minimum
regulatory requirements of the NBU in the short term, although it does not
regard it as large enough to fully absorb potential credit losses on the
loan portfolio.

At the same time, Moody's notes that the bank has not yet reached an
agreement with its creditors on the restructuring terms of the US$70 million
syndicated loan on which it defaulted in March 2009, as well as on the terms
and conditions of repayments of further amounts of wholesale funding that
were originally due in H1 2009 and that are now due in 2010.

The details of the restructuring terms proposed by the bank to its creditors
on the syndicated loan and on other wholesale debt due in 2009 and 2010 have
not been disclosed to Moody's. However, the rating agency notes that if the
terms and conditions are such that the expected recovery rate on the bank's
debt falls below that implied by a Caa2 rating, the current Caa2 debt rating
could be downgraded further. At the same time, the bank's deposit ratings
may benefit from the bank's improved post-restructuring liquidity position
and from somewhat improved capitalisation.

The last rating action on F&C was implemented on 24 March 2009 when Moody's
downgraded the bank's ratings and placed them on review with direction
uncertain.

The principal methodologies used in rating Bank Finance and Credit were
"Bank Financial Strength Ratings: Global Methodology" and "Incorporation of
Joint-Default Analysis into Moody's Bank Ratings: A Refined Methodology,"
which can be found at www.moodys.com in the Rating Methodologies
sub-directory under the Research & Ratings tab. Other methodologies and
factors that may have been considered in the process of rating this issuer
can also be found in the Rating Methodologies sub-directory on Moody's
website.

Headquartered in Kiev, Ukraine, Bank Finance and Credit reported
consolidated total Ukrainian Accounting Standards (UAS) assets of UAH18.3
billion (US$2.38 billion) at 31 March 2009.