Fitch to rate Azerbaijan Mortgage Fund upon completed restructuring
Fitch Ratings says it will shortly assign ratings to OJSC Azerbaijan Mortgage Fund (OJSC AMF), which is a legal successor of Azerbaijan Mortgage Fund under the Central Bank of Azerbaijan Republic (AMF). “We will simultaneously withdraw AMF's ratings once its restructuring is complete,” the agency said in a statement.
Fitch expects AMF will soon finalise its restructuring process, which started on 27 October 2015 when the President of Azerbaijan signed a decree establishing the OJSC AMF. AMF is being reorganised into an open joint stock company, which is fully owned by the state. The charter of the new entity was registered in June 2016. At end-September 2016, OJSC AMF registered issue of shares, 100% of which are held by the state.
AMF's ratings are equalised with Azerbaijan's sovereign ratings (BB+/Negative), reflecting the entity's public sector status, its tight control by the sovereign and its important role in the government's housing finance policy. Fitch uses its public-sector entities rating criteria to rate AMF, which it views as a credit-linked entity.
AMF is a state institution that was established under the decree of the President of the Republic of Azerbaijan in September 2005. The entity acts as the government's agent in implementing the state's social housing programmes and supports provision of dwelling space to Azerbaijani citizens through long-term mortgage loans. AMF also contributes to the stability and development of Azerbaijan's financial sector by refinancing mortgage loans of commercial banks and issuing mortgage-backed securities.
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