Fitch Upgrades Commerzbank Capital Funding Trust I to 'BBB-'

Fri Aug 1, 2014 11:36am EDT

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(The following statement was released by the rating agency) FRANKFURT/LONDON, August 01 (Fitch) Fitch Ratings has upgraded Commerzbank Capital Funding Trust I securities (CCFT I) to 'BBB-' from 'BB-', following amendments to the terms and conditions. The rating of the securities is anchored to Commerzbank AG's (CBK) Viability Rating of 'bbb'. KEY RATING DRIVERS - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES Subordinated debt and other hybrid capital issued by CBK are all notched down from CBK's VR in accordance with Fitch's assessment of each instrument's respective non-performance and relative loss severity risk profiles, which vary considerably. The former Tier 1 CCFT I instruments have been upgraded to 'BBB-', one notch below CBK's VR, elevating them to the same Lower Tier II capital class as the silent partnership certificates of Dresdner Funding Trust IV (Dresdner IV). The CCFT I securities now have the same senior liquidation preference as the Dresdner IV securities and the profit-dependent trigger has been removed. Similar to Dresdner IV certificates the amended CCFT I instruments reflect minimal incremental non-performance risk characteristics (zero notch) and higher loss severity (one notch) relative to CBK's VR. On 23 June 2014, CBK reported that in light of the similarities between the court action on Commerzbank Capital Funding Trust II (CCFT II, rated BBB-) on 6 of January 2014 and the court action against CCFT I, CBK and the CCFT I Trust were required to execute similar amended agreements to the CCFT I as they did previously with the CCTF II. RATING SENSITIVITIES - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES Subordinated debt and other hybrid capital issued by CBK and associated SPVs are primarily sensitive to a change in CBK's VR. Contact: Primary Analyst Michael Dawson-Kropf +49 69 7680 76 113 Fitch Deutschland GmbH Taunusanlage 17 60325 Frankfurt am Main Secondary Analyst Roger Schneider Director +49 69 76 80 76 242 Committee Chairperson Erwin van Lumich Managing Director +34 93 323 8403 Media Relations: Elaine Bailey, London, Tel: +44 203 530 1153, Email: Additional information is available on Applicable criteria, 'Global Financial Institutions Rating Criteria', dated 31 January 2014, are available at Applicable Criteria and Related Research: Global Financial Institutions Rating Criteria here Assessing and Rating Bank Subordinated and Hybrid Securities Criteria 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.