A Ukrainian banking law amendment might impact ABS exposure securitizing foreign currency denominated exposure, said analysts at Moody’s Investors Service.
The Ukrainian government has proposed a change to the country’s law on banks and banking to allow borrowers to repay foreign currency loans using domestic currency (the hryvnia).
Payment would be at the official exchange rate set by the National Bank of Ukraine (NBU) on the date of repayment and no Ukrainian-based bank would be allowed to reject such payment.
The draft bill was submitted to Parliament by President Yushchenko on June 15th and a decision is expected in September. If the amendment is enacted, Ukrainian securitizations backed by foreign currency receivablescould face further rating actions and potential losses