June 20, 2014 / 4:32 AM / 3 years ago

Fitch Rates ANZ's Basel III Sub-Debt Issue 'A+'

(The following statement was released by the rating agency) SYDNEY, June 20 (Fitch) 20 June 2014: Fitch Ratings has assigned a rating of 'A+' to Australia and New Zealand Banking Group Limited's (ANZ, AA-/Stable) AUD750m Basel-III compliant Tier 2 instrument, due to settle on 25 June 2014. The direct, unsecured and subordinated obligations will be issued under ANZ's Australian Dollar Debt Issuance Program. Final maturity is 25 June 2024, although ANZ can redeem the instruments on any interest payment date on or after 25 June 2019 with the prior written approval of the Australian Prudential Regulation Authority (APRA). The notes include a non-viability clause and will qualify as regulatory Tier 2 capital for the bank. KEY RATING DRIVERS & RATING SENSITIVITIES The instrument is classified as subordinated debt and is rated one notch below ANZ's Viability Rating (VR) of 'aa-' to reflect its below-average recovery prospects compared to senior unsecured instruments. The notes would convert to equity in part or in full should APRA deem that without the conversion or without a public sector capital injection, ANZ were non-viable. The notes would be written off in part or in full were if ANZ were unable to convert the notes to equity within five business days of the trigger event date. No additional notching from the VR for non-performance is applied as the VR already captures the point of non-viability. Under Fitch's methodology, the instrument does not qualify for any equity credit. ANZ's subordinated debt ratings are broadly sensitive to the same considerations that might affect the bank's VR (see Rating Action Commentary dated 17 June 2014). Contacts: Primary Analyst Tim Roche Senior Director +61 2 8256 0310 Fitch Australia Pty. Ltd., Level 15, 77 King Street, Sydney NSW 2000 Andrea Jaehne Director +61 2 8256 0343 Committee Chairperson Mark Young Managing Director +65 6796 7229 Media Relations: Leni Vu, Sydney, Tel: +61 2 8256 0326, Email: Leni.Vu@fitchratings.com. Additional information is available on www.fitchratings.com Applicable criteria, "Global Financial Institutions Rating Criteria", dated 31 January 2014 and "Assessing and Rating Bank Subordinated and Hybrid Securities", dated 31 January 2014 are available at www.fitchratings.com. 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 FREE WEB SITE AT 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. Fitch Australia Pty Ltd holds an Australian financial services licence (AFS licence no. 337123) which authorises it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001.

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