(The following statement was released by the rating agency)LONDON, May 16 (Fitch) Fitch Ratings has affirmed Moscow Stars B.V., as follows:Class A (ISIN: XS0307297225): affirmed at 'BBsf'; Outlook StableClass B (ISIN: XS0307297811): affirmed at 'BBsf'; Outlook StableMoscow Stars B.V. is a securitisation of mortgage loans originated by CB Moskommertsbank (MKB; CCC).KEY RATING DRIVERSRating CapAccording to Fitch's criteria on legal risks in emerging market securitisations, the notes' ratings are constrained by a maximum six-notch uplift above MKB's Long-term Issuer Default Rating (IDR). As a result, the notes are capped at 'BBsf'. In addition, the ratings are also capped at Russia's Country Ceiling (BBB+), as the structure does not have any mitigants for transfer and convertibility (T&C) risk. Performance Within ExpectationsLoans in arrears by more than three months had increased to 14.5% as of March 2014 compared with 12.3% as of March 2013. The increasing trend in the past year is partially due to the depreciation of the Russian rouble in relation to US dollar, which has put pressure on borrower affordability as the underlying loans in the portfolio are US dollar-denominated while the majority of borrowers generate income in local currency. However, the increase in arrears and default is partially mitigated by the high reserve fund (48% of current note balance), which provides extra liquidity and subordination to the rated notes. Reserve Fund IncreasingThe reserve fund target increased to USD19.8m in March 2009. Since then excess spread has been trapped to top-up the reserve fund to its new target amount. As of March 2014, the reserve fund stood at USD16.5m compared to USD9.9m at close. Once the reserve fund reaches its target, which is not expected to occur in the next 18 months, it will start amortising until it reaches its floor amount of USD2.8m. Proceeds released from the reserve fund will be used to clear the principal deficiency ledger and pay off the subordinated loan. Sufficient Credit Enhancement (CE)CE for class A and B has built up to 107% and 65% compared with 17% and 8% at close, as a result of sequential amortisation of the notes and the continued replenishment of the reserve fund. Fitch considers CE for both rated tranches to be sufficient to withstand the 'BBsf' rating stresses and expect CE to continue to build up. For this reason, the ratings of both tranches have been affirmed with a Stable Outlook. RATING SENSITIVITIESA change in Russia's IDR and Country Ceiling, as well as a change in MKB's IDR, could result in a revision of the highest achievable ratings.Political uncertainty, combined with a contracting economy, may adversely affect borrower affordability which could lead to increasing arrears and defaults.Contact: Lead Surveillance Analyst Jiaxin HuangAnalyst+44 20 3530 1572Fitch Ratings Limited30 North ColonnadeLondon E14 5GNSecondary AnalystNicolas ArdointDirector+44 20 3530 1106Committee ChairpersonSanja PaicSenior Director+44 20 3530 1282Media Relations: Athos Larkou, London, Tel: +44 203 530 1549, Email: athos.larkou@fitchratings.com.Additional information is available on 
  www.fitchratings.com
 Sources of information: Investor Reports.Applicable criteria, 'EMEA RMBS Master Rating Criteria', dated 6 June 2013; 'EMEA Residential Mortgage Loss Criteria', dated 6 June 2013; 'Criteria for Rating Securitizations in Emerging Markets' dated 27 June 2013; 'Counterparty Criteria for Structured Finance Transactions' and 'Counterparty Criteria for Structured Finance Transactions: Derivative Addendum', dated 14 May 2014; 'Global Structured Finance Rating Criteria', dated 24 May 2013 are available at 
  www.fitchratings.com.
 Applicable Criteria and Related Research: EMEA RMBS Master Rating Criteria
  http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=709893
 EMEA Residential Mortgage Loss Criteria
  http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=709915
 Criteria for Rating Securitizations in Emerging Markets 
  http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=711605
 Counterparty Criteria for Structured Finance and Covered Bonds
  http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158
 Counterparty Criteria for Structured Finance and Covered Bonds: Derivative Addendum
  http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744175
 Global Structured Finance Rating Criteria
  http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661
 Additional Disclosure Solicitation Status 
  http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=830454
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