TEXT-S&P: 2 more Latin American BBVA subs unaffected by downgrade
Oct 16 - Standard & Poor's Ratings Services said today that the issuer credit ratings on Banco Bilbao Vizcaya Argentaria Paraguay S.A. (BBVA Paraguay; BB-/Stable/B) and BBVA Banco Frances S.A. (national scale rating raAA/Negative/--) are not immediately affected by the downgrade of their parent, Spain-based Banco Bilbao Vizcaya Argentaria S.A. (BBVA; BBB-/Negative/A-3). (For more information on the rating action on BBVA, see "Various Rating Actions On Spanish Financial Institutions Following Sovereign Downgrade," published Oct. 15, 2012, on RatingsDirect on the Global Credit Portal.) The issuer credit ratings on BBVA Paraguay and BBVA Banco Frances continue to reflect the companies' stand-alone credit profiles (SACPs) and do not reflect any uplift for group support, since the ratings are at the sovereign level. Further downgrade of BBVA would most likely not affect the ratings on these subsidiaries, given the gap between their SACPs and the ratings on BBVA. We classify the governments of Paraguay and Argentina as "support uncertain" under our bank criteria methodology (see "Banks: Rating Methodology And Assumptions," published Nov. 9, 2011). For that reason, and despite the high systemic importance of BBVA Banco Frances and BBVA Paraguay, respectively, the issuer credit ratings on these banks do not factor extraordinary government support. As a result, the ratings on these two subsidiaries continue to be tied more to the evolution of the ratings on the parent and the SACP on each company. We will continue to monitor BBVA's creditworthiness and its impact on the subsidiaries' SACPs, financial and dividend policies, liquidity and funding, and related party transactions.
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