(The following statement was released by the rating agency)
SINGAPORE, March 10 (Fitch) Fitch Ratings has assigned
Overseas Bank Limited's (UOB) proposed US dollar-denominated
Tier 2 capital securities an expected rating of 'A+(EXP)'.
The final rating is subject to the receipt of final
documentation conforming to
information already received.
KEY RATING DRIVERS
The Basel III-compliant Tier 2 securities are rated one notch
below UOB's 'aa-'
Viability Rating (VR) to reflect their higher loss-severity risk
senior unsecured instruments due to their subordinated status,
the presence of a
non-viability clause and the partial rather than mandatory full
The Monetary Authority of Singapore (MAS) has sole discretion in
UOB is non-viable, and if it does so, the securities may be
written down in full
or in part to the extent that MAS considers necessary to restore
of the bank. There are no write-back features on the securities.
No additional notching has been ascribed to non-performance
risk, despite the
presence of non-viability terms, which Fitch regards to be of a
incremental risk relative to the VR assigned. The instruments
will not qualify
for equity credit under Fitch's criteria.
Holders of these securities - and other Tier 2 securities of UOB
- rank below
the bank's senior creditors, including depositors, but above the
shareholders, preference shareholders, and holders of perpetual
securities and existing Upper Tier 2 securities in priority of
A change in UOB's VR will have an impact on the securities
For more details on UOB's ratings and credit profile, see "Fitch
OCBC & UOB at 'AA-'; Outlook Stable", dated 23 October 2013, and
rating report, dated 29 April 2013, available at
UOB's other ratings are as follows:
Long-Term Issuer Default Rating 'AA-'; Outlook Stable
Short-Term Issuer Default Rating 'F1+'
Viability Rating 'aa-'
Support Rating '1'
Support Rating Floor 'A-'
Fitch Ratings Singapore Pte Ltd
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#35-05 Suntec Tower Four
+65 6796 7230
+65 6796 7229
Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234,
Additional information is available at www.fitchratings.com.
Applicable criteria, "Global Financial Institutions Rating
Criteria", dated 31
January 2014, and "Assessing and Rating Bank Subordinated and
Securities", dated 31 January 2014, are available at
Applicable Criteria and Related Research:
Global Financial Institutions Rating Criteria
Assessing and Rating Bank Subordinated and Hybrid Securities
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