TEXT-S&P rates Banco Santander-Chile notes 'A'
Dec 5 - Standard & Poor's Ratings Services said today it assigned its 'A' issue rating to Banco Santander-Chile S.A.'s (BSCh; A/Negative/A-1) Chinese Renminbi (CNY) 500 million 3.75% senior unsecured fixed notes due Nov. 26, 2014. "The rating on proposed notes reflect their pari passu ranking to the bank's other senior unsecured debt obligations, and as such it is the same as the bank's long-term issuer credit rating," said Standard & Poor's credit analyst Arturo Sanchez. The bank will use the proceeds for general corporate purposes, which include the bank's strategy to continue diversifying its funding structure while trying to access cheaper funding sources. The CNY-denominated notes don't represent a foreign exchange risk or higher refinancing risk, in our view. The latter because the amount issued is around $80 million, which represents approximately 0.2% of the BSCh's total funding base. "Despite our favorable view of a funding strategy targeting lower funding costs and a more diversified funding structure, we keep monitoring BSCh's funding and liquidity management to assess any aggressiveness that could weaken its stand-alone credit profile. This stems from the weakening credit quality of its Spain-based parent, Banco Santander S.A., which has suffered several downgrades over the past few months," added Mr. Sanchez. The ratings on BSCh continue to reflect its "strong" business position, "adequate" capital and earnings, "adequate" risk position, "average" funding, and "adequate liquidity" (as our criteria defines these terms). For a complete credit rating rationale on BSCh, please see "Banco Santander-Chile S.A. 'A/A-1' Ratings Affirmed; Long-Term Rating Outlook Revised To Negative," published July 13, 2012. RELATED CRITERIA AND RESEARCH -- Banco Santander-Chile S.A. 'A/A-1' Ratings Affirmed; Long-Term Rating Outlook Revised To Negative, July 13, 2012 -- Banks: Rating Methodology And Assumptions, Nov. 9, 2011 -- Banking Industry Country Risk Assessment Methodology and Assumptions, Nov. 9, 2011 -- Group Rating Methodology And Assumptions, Nov. 9, 2011 RATINGS LIST Banco Santander-Chile S.A. Issuer credit rating A/Negative/A-1 Rating Assigned Banco Santander-Chile S.A. CNY500M 3.75% senior unsecured fixed notes A Complete ratings information is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column.
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