Fitch af­firms rat­ings of six Span­ish pro­grammes

The Pak Banker - - COMPANIES/BOSS - -AFP

MADRID: Fitch Rat­ings, a na­tion­ally rec­og­nized sta­tis­ti­cal rat­ing or­ga­ni­za­tion (NRSRO) des­ig­nated by the U.S. Se­cu­ri­ties and Ex­change Com­mis­sion, af­firmed the rat­ings of six Span­ish mort­gage cov­ered bond pro­grammes (Cedu­las Hipote­carias, or CH) fol­low­ing a full sec­tor re­view.

Span­ish CH are el­i­gi­ble for a max­i­mum Is­suer De­fault Rat­ing (IDR) up­lift of two notches given their ex­emp­tion from bail-in in a res­o­lu­tion sce­nario, our as­sess­ment that res­o­lu­tion of the is­suer will not re­sult in the en­force­ment of re­course against the cover pool and the low risk of un­der­col­lat­er­al­i­sa­tion at the point of res­o­lu­tion. The CH of Abanca, Bankia, BMN, CLCC and San­tander have a two-notch IDR up­lift, as the is­su­ing banks' Long-Term IDRs are driven by their Vi­a­bil­ity Rat­ings (VRs). Ca­ja­mar's CH have a two-notch IDR up­lift as the bank's Long-Term IDR is based on its par­tic­i­pa­tion/in­te­gra­tion in a mu­tual sup­port scheme.

All Span­ish pro­grammes have a Pay­ment Con­ti­nu­ity Up­lift (PCU) of zero notches given that, in the Span­ish frame­work, there are no spe­cific liq­uid­ity pro­tec­tion mech­a­nisms to bridge tem­po­rary short­falls af­ter the re­course to the cover pool has been en­forced. Span­ish CH have hard-bul­let ma­tu­ri­ties while cover as­sets grad­u­ally amor­tise.

Mean­while, Fitch Rat­ings as­signed an ex­pected longterm for­eign cur­rency rat­ing of ' BB(exp)' to Banco do Brasil S.A.'s (BdB) pro­posed se­nior un­se­cured notes due Jan­uary 2025. As per the pro­posal, the is­suance will be be­tween USD750 mil­lion and USD1 bil­lion. Fi­nal amount and in­ter­est will be de­fined upon book build­ing. The bonds' pro­ceeds shall be used for gen­eral cor­po­rate pur­poses. The fi­nal rat­ing is con­tin­gent upon the re­ceipt of fi­nal doc­u­ments con­form­ing to the in­for­ma­tion al­ready re­ceived.

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