TEXT - S&P rates Banco Santander (Mexico)

Mon Nov 5, 2012 2:17pm EST

Nov 5 - Standard & Poor's Ratings Services said today it assigned its 'BBB'
long-term issue rating to Banco Santander (Mexico) S.A. Institucion de Banca
Multiple Grupo Financiero Santander's (BBB/Stable/A-2) up to $1 billion senior
unsecured notes. The notes will have a maturity of up to 10 years.

"The rating on the bank's senior notes reflects its pari passu ranking to 
Banco Santander Mexico's other unsecured debt obligations, and as such it is 
the same as the bank's long-term issuer credit rating. The bank will use the 
proceeds to extend its funding profile--as it continues to expand its mortgage 
loan portfolio--and refinance upcoming market debt maturities in 2013," said 
Standard & Poor's credit analyst Arturo Sanchez.

The amount of this issuance, along with the amount of debt that the bank will 
refinance with these proceeds, will keep refinancing risk very manageable. "We 
forecast the $1 billion senior notes will represent about 2% of the bank's 
total interest-bearing liabilities in 2013, and their up to 10 year maturity 
keeps a healthy debt maturity profile," added Mr. Sanchez. We expect market 
debt to remain at less than 5% of the bank's total funding base for the next 
12 months.

As a result of the recent downgrades of its Spain-based parent, Banco 
Santander S.A. (BBB/Negative/A-2), we will continue to closely monitor Banco 
Santander Mexico's dividend and liquidity policies, to address any 
aggressiveness that could weaken its stand-alone credit profile in terms of 
capital and earnings, and liquidity.

The issuer credit ratings on Banco Santander Mexico reflect its "adequate" 
business position, "strong" capital and earnings, "adequate" risk position, 
and "average" funding with "adequate" liquidity (as our criteria defines them).

For a complete credit rating rationale on Banco Santander Mexico, please see 
"Banco Santander (Mexico) S.A. Institucion de Banca Multiple Grupo Financiero 
Santander," published Oct. 24, 2012.


RELATED CRITERIA AND RESEARCH
     -- Banks: Rating Methodology And Assumptions, Nov. 9, 2011
     -- Banking Industry Country Risk Assessment Methodology And Assumptions, 
Nov. 9, 2011
     -- Group Rating Methodology For Banks, Nov. 9, 2011
     -- The Influence Of Asset Encumbrance On Our Bank Ratings, Sept. 6, 2012
     -- Banco Santander (Mexico) S.A. Institucion de Banca Multiple Grupo 
Financiero Santander, Oct. 24, 2012


RATINGS LIST

Banco Santander (Mexico) S.A. Institucion de Banca Multiple Grupo Financiero 
Santander
  Issuer credit rating           BBB/Stable/A-2


Rating Assigned

Banco Santander (Mexico) S.A. Institucion de Banca Multiple Grupo Financiero 
Santander
  $1B senior unsecured notes     BBB
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