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Fitch Rates Investitionsbank Berlin IDR 'AAA'; Outlook Stable
July 28, 2014 / 2:41 PM / 3 years ago

Fitch Rates Investitionsbank Berlin IDR 'AAA'; Outlook Stable

(The following statement was released by the rating agency) FRANKFURT/LONDON, July 28 (Fitch) Fitch Ratings has assigned Investitionsbank Berlin (IBB) a Long-term Issuer Default Rating (IDR) of 'AAA', Short-term IDR of 'F1+', Support Rating of '1' and Support Rating Floor (SRF) of 'AAA'. The Outlook on the Long-term IDR is Stable. A full list of rating actions is available at the end of this rating action commentary. KEY RATING DRIVERS - IDRS, SR, SRF and Senior Debt The bank's Long-Term IDR is equalised with that of its guarantor, the State of Berlin (AAA/Stable). Berlin covers IBB via a maintenance obligation (Anstaltslast), which guarantees the continuation of IBB as an economic entity. It also provides an explicit guarantee to IBB's liabilities issued after 1 September 2004; liabilities issued before this date are covered by Berlin's statutory guarantor's liability (Gewaehrtraegerhaftung). Berlin's creditworthiness is underpinned by the strength of the German solidarity system, which links its creditworthiness to that of the Federal Republic of Germany (AAA/Stable; see Fitch's special report Institutional Framework for German Subnationals, published April 2008 and available at www.fitchratings.com). This formalised support is underpinned by the role that the bank fulfils for the State of Berlin. IBB's mandate to provide promotional and development funding is outlined in the Law Concerning IBB ("Law Establishing Investitionsbank Berlin as an Independent Legal Entity") and its statutes. The bank provides funding for economic and social infrastructure, and affordable lending to energy-efficient real estate projects in Berlin. In addition, IBB takes on special tasks as requested by the State of Berlin, for example, financing the re-municipalisation of privatised infrastructure or the acquisition of state-guaranteed real estate funds. The rating of IBB's state-guaranteed debt reflects the credit quality of the guarantor. Fitch does not assign a Viability Rating to IBB as its business model is strongly linked to the support of its state guarantor. RATING SENSITIVITIES - IDRs, SR, SRF and Senior Debt The bank's IDRs are sensitive to a change in Fitch's assumptions around the owner's propensity or ability to provide support, specifically a rating action on Germany or the State of Berlin, or a change in the terms of the state guarantees. Fitch does not consider either of these scenarios to be likely in the foreseeable future. The Stable Outlook on the bank's ratings reflects that of Berlin, and Fitch's view that the nature of the state support is unlikely to change significantly in the medium term due to the strategic importance of IBB to the State of Berlin's economy. The support structure was approved by the European Union in 2002, although under competition law the bank may only engage in non-competitive activity. This also makes significant changes to the bank's business model unlikely in the medium term. On 26 March, Fitch revised the Outlook on over 40 European banking groups to Negative from Stable, indicating a likely downgrade within one to two years due to weakening of sovereign support assumptions. For further information, please refer to relevant bank-specific Rating Action Comments and Rating Action Reports available at www.fitchratings.com. Outlooks remain Stable for banks that undertake a specific policy function with state guarantees for all liabilities and/or solvency guarantees, such as IBB. However, Fitch plans to make a technical change within the next 12-18 months by switching the source of support for banks guaranteed by their Bundesland from systemic to institutional. This will better align the application of criteria with the agency's practice in other countries and means that these banks will no longer have a SRF. This technical change means that Fitch is looking directly to the federal state for support rather than indirectly from Germany. It has no effect on IBB's IDRs given that Fitch assesses all 16 German Bundeslaender (federal states) to have 'AAA' creditworthiness. The rating actions are as follows: Investitionsbank Berlin Long-term IDR assigned at 'AAA', Stable Outlook Short-term IDR assigned at 'F1+' Support Rating assigned at '1' Support Rating Floor assigned at 'AAA' IBB's securities assigned a 'AAA' rating are as follows: DE000A1X28Q7 DE000A0B1C38 DE000A0B1C46 DE000A0B1C12 DE000A1X28R5 DE000A0B1YN4 DE000A1MLZ05 DE000A0JCH87 DE000A1MLZ13 DE000A0B1YR5 DE000A1C99A6 DE000A1C99C2 DE000A1H3HF4 DE000A1EWJ02 DE000A1TNAY9 DE000A0D6W43 DE000A1H3HH0 DE000A1EWJ69 DE000A1EWJ85 DE000A1X28L8 DE000A1TNAR3 DE000A0JEU13 DE000A1MLZ39 DE000A1H3HE7 DE000A1EWJ93 DE000A1H3HK4 DE000A0PNH52 DE000A1MLZ70 DE000A1H3HJ6 DE000A0KPR95 DE000A1X28M6 DE000A1EWJ77 DE000A0SL934 DE000A1TNAS1 DE000A1X28K0 DE000A1EWJ28 DE000A1EWJ51 DE000A1X28N4 DE000A1C99B4 DE000A1TNAT9 DE000A1MLZ88 DE000A0B1YM6 DE000A1TNAQ5 DE000A1TNAU7 DE000A1TNAX1 DE000A1TNAZ6 DE000A1X28J2 DE000A1X28P9 DE000A1H3HL2 DE000A1TNAW3 DE000A1MLZ21 DE000A1MLZ47 DE000A1MLZ54 DE000A1MLZ62 DE000A0JCH46 DE000A1X28S3 DE000A1X28T1 Contact: Primary Analyst Michael Dawson-Kropf Senior Director +49 69 768 076 113 Fitch Deutschland GmbH Taunusanlage 17 60325 Frankfurt Secondary Analyst Krista Davies Associate Director +44 20 3530 1579 Committee Chairperson Erwin van Lumich Managing Director +34 93 323 8403 Media Relations: Elaine Bailey, London, Tel: +44 203 530 1153, Email: elaine.bailey@fitchratings.com; Peter Fitzpatrick, London, Tel: +44 20 3530 1103, Email: peter.fitzpatrick@fitchratings.com. Additional information is available on www.fitchratings.com. Applicable criteria, Global Financial Institutions Rating Criteria, dated 31 January 2014 are available at www.fitchratings.com. Applicable Criteria and Related Research: Global Financial Institutions Rating 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.

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