Fitch Rates DBS Group Holdings' GMTN Programme at 'AA-'

Wed Mar 26, 2014 10:13pm EDT

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(The following statement was released by the rating agency) SINGAPORE, March 26 (Fitch) Fitch Ratings has assigned a senior unsecured rating of 'AA-' to the DBS Group Holdings Ltd. (DBSH, AA-/Stable) component of the joint USD15bn global medium term note (GMTN) programme it shares with its subsidiary, DBS Bank Ltd. (DBS Bank, AA-/Stable). Concurrently, Fitch has confirmed the senior unsecured rating on the DBS Bank component of the same programme at 'AA-'. DBSH is a bank holding company listed on the Singapore stock exchange. Its only direct operating subsidiary is DBS Bank, which DBSH fully owns. DBSH and DBS Bank are supervised by the same regulator, the Monetary Authority of Singapore (MAS), on a group-wide basis. The new rating and rating confirmation follow a periodic update of the programme, including revisions of certain terms and conditions to incorporate DBS Group Holdings Ltd. as an issuer of senior and subordinated notes under the programme, and to reflect the most recent regulatory changes. Fitch notes that the ratings are assigned to the GMTN programme and not to the notes issued under the programme. There is no assurance that the notes issued in the future by either issuer under the programme will be assigned a rating, or that the rating assigned to a specific issue under the programme will have the same rating as the programme rating. The agency does not assign generic programme ratings to subordinated notes, which will be rated on a case-by-case basis. KEY RATING DRIVERS The senior unsecured programme ratings are at the same level as DBSH's and DBS Bank's 'AA-' Long-Term Issuer Default Ratings (IDRs). This is because the senior notes of each issuer are direct, unsubordinated and senior unsecured obligations of either the holding company or the bank, and rank equally with all other unsecured and unsubordinated obligations of either the holding company or the bank. Notes issued by DBSH are structurally subordinated to all existing and future liabilities and obligations of its subsidiaries, including DBS Bank. Nevertheless, the Viability Rating (VR) and IDR of DBSH are equalised with that of DBS Bank due to DBSH's straightforward balance sheet, low double leverage ratio and expected low leverage over the near to medium term. RATING SENSITIVITIES A change in DBSH's or DBS Bank's IDRs, presently both on Stable Outlooks, will have an impact on the programme rating. DBSH's IDR and VR may change if Fitch assesses that the factors for equalising the ratings with that of DBS Bank, as detailed above, have changed. For more details on DBS Bank's rating and credit profile, see "Fitch Affirms DBS, OCBC & UOB at 'AA-' ; Outlook Stable", dated 23 October 2013, DBS Bank's full rating report, dated 22 April 2013 and Fitch's Financial Institutions 2014 Outlook Compendium, dated 19 February 2014. For more details on DBSH's rating and credit profile, see "Fitch Rates DBS Group Holdings 'AA-' /Stable", dated 1 November 2013. DBS Bank's other ratings are as follows: Long-Term IDR 'AA-', Outlook Stable Short-Term IDR 'F1+' Viability Rating 'aa-' Support Rating '1' Support Rating Floor 'A-' DBSH' other ratings are as follows: Long-Term IDR 'AA-', Outlook Stable Short-Term IDR 'F1+' Viability Rating 'aa-' Support Rating '5' Support Rating Floor 'NF' Contact: Primary Analyst Ambreesh Srivastava Senior Director +65 6796 7218 Fitch Ratings Singapore PTE Ltd 6 Temasek Boulevard #35-05 Suntec Tower Four Singapore 038986 Secondary Analyst Mikho Irawady Associate Director +65 6796 7230 Committee Chairperson Mark Young Managing Director +65 6796 7229 Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com. Additional information is available on www.fitchratings.com Applicable criteria, "Global Financial Institutions Rating Criteria", dated 31 January 2014 and "Rating FI Subsidiaries and Holding Companies", dated 10 August 2012, are available at www.fitchratings.com. Applicable Criteria and Related Research: Global Financial Institutions Rating Criteria here Rating FI Subsidiaries and Holding Companies here Additional Disclosure Solicitation Status here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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