BAKU, Azerbaijan, November 13. Fitch Ratings has affirmed Mortgage and Credit Guarantee Fund of the Republic of Azerbaijan's (MCGF) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at 'BBB-'. The Outlooks are Stable, Trend reports citing Fitch.
“We view MCGF as a government-related entity (GRE) with strong links to Azerbaijan (BBB-/Stable) and an important policy role in the provision of affordable housing and fostering business development by facilitating financing for SMEs. This leads us to equalise MCGF's IDRs with those of Azerbaijan, under our GRE criteria. We do not assign MCGF a Standalone Credit Profile because its policy-driven mission on behalf of the government, strong operational and financial links with it, and reliance on state funding make a standalone assessment not meaningful,” reads the latest report issued by Fitch.
The rating agency sees 'Virtually certain' extraordinary support from Azerbaijan to MCGF, as underlined by a support score of 50, out of a maximum 60, under its GRE criteria.
"State-owned MCGF has special status as a non-commercial organisation and can only be liquidated or reorganised by presidential decree. Operations are tightly controlled by the government through a board of trustees, whose members are appointed by the president. The board consists of representatives from the presidential administration, ministries and central bank. The board approves the fund's upper limits for its borrowing, the maximum amount of mortgage loans it can provide, strategic goals, budget and investment programme."