TEXT-Fitch expects to rate BBVA Banco Continental notes 'BBB+'
Jan 22 - Fitch Ratings expects to assign a 'BBB+' rating to BBVA Banco Continental's (Continental) upcoming up to four-year U.S. dollar senior unsecured, unsubordinated notes. A list of Continental's current ratings follows the end of this press release. The notes - for an amount to be determined but not to exceed USD300m - will mature in up to four years. The notes will carry a fixed interest rate to be set at the time of issuance; interest payments will be made semi-annually until maturity. The notes will be BBVA Banco Continental's direct senior unsecured obligations and rank pari-passu with the bank's existing and future senior obligations. The notes will rank senior to BBVA Banco Continental's existing and future subordinated and junior subordinated debt. In addition, the notes will be structurally subordinated to the existing and future obligations of BBVA Banco Continental's subsidiaries - including trade payables - and to labor, tax and other obligations that are privileged by law. BBVA Banco Continental has long-term local and foreign currency Issuer Default Ratings (IDR) of 'BBB+' both with a Negative Outlook. The bank's IDRs are driven by BBVA Banco Continental's Viability Rating (VR, 'bbb+'), which in turn reflects its solid franchise, sound balance sheet, solid performance and robust asset quality. The Negative Outlook is in line with that of BBVA Banco Continental's parent (BBVA, rated 'BBB+') and acknowledges the potential contagion risk from the ongoing crisis that BBVA faces in Spain. The notes will be rated 'BBB+', at the same level as the bank's IDRs. BBVA Banco Continental will use the proceeds from the planned issue for general corporate purposes. The bank's leverage will slightly increase in the short run but Fitch expects that gradual debt replacement, continued growth and positive returns, will allow the bank to sustain adequate Fitch core capital levels. Fitch rates BBVA Banco Continental as follows: --Long-term foreign currency IDR 'BBB+', Negative Outlook; --Short-term foreign currency IDR 'F2'; --Long-term local currency IDR 'BBB+', Negative Outlook; --Short-term local currency IDR 'F2'; --Viability rating 'bbb+'; --Support Rating '2'; --Support floor 'BBB-'; --Senior unsecured debt 'BBB+'. In addition, the following entities issued securities whose underlying credit risk is that of BBVA Banco Continental; Fitch's ratings of those securities are listed below: --Continental Trustees (Cayman) Ltd 'BB+'; --Continental Senior Trustees (Cayman) Ltd 'BBB+'; --Continental Senior Trustees (Cayman) II Ltd 'BBB+'. Applicable Criteria and Related Research: --'Global Financial Institutions Rating Criteria' (Aug. 15, 2012). Applicable Criteria and Related Research: Global Financial Institutions Rating Criteria
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