Fitch Ratings has downgraded Azerbaijan Mortgage Fund under the Central Bank of Azerbaijan Republic's (AMF) Long-term foreign and local currency Issuer Default Ratings (IDRs) to 'BB+' from 'BBB-'. The Outlook is Negative.

The rating actions follow Fitch's recent downgrade of Azerbaijan's Long-term foreign and local currency IDRs to 'BB+' from 'BBB-'. The Negative Outlook reflects that of the sovereign. The Country Ceiling has been revised to 'BB+' from 'BBB-'.

KEY RATING DRIVERS 

AMF's ratings are equalised with Azerbaijan's sovereign ratings, reflecting the entity's public sector status, its tight control by the sovereign through the central bank and its important role in the government's housing finance policy. 

AMF also benefits from a buyback guarantee for its bonds from the central bank. Fitch uses its public-sector entities rating criteria to rate AMF, which it views as a credit-linked entity.

RATING SENSITIVITIES

A rating change would be triggered by changes to the ratings of the sovereign. Changes to the legal status and public control that would lead to a dilution of control or likelihood of support by the sovereign could result in the ratings 

being notched down from the sovereign ratings.