(The following statement was released by the rating agency)
SINGAPORE, May 13 (Fitch) Fitch Ratings has assigned
Overseas Bank Limited's (UOB) proposed Singapore
III-compliant Tier 2 subordinated notes an expected rating of
notes will be issued under the bank's SGD10bn euro medium-term
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 necessary to restore the viability of
the bank. A
write-down of the Tier 2 notes will occur only after any
Additional Tier 1
securities with loss-absorption features have been fully written
which the Tier 2 notes would be written down pro rata with other
instruments that contain loss-absorption features. There are no
features on the securities.
No additional notching has been ascribed to non-performance
risk, which Fitch
regards to be of minimal incremental risk relative to the VR
instruments will not qualify for equity credit under Fitch's
In the event of any winding-up proceeding, holders of these
securities - and
other Tier 2 securities of UOB - rank below the bank's senior
including depositors, but above the bank's ordinary
shareholders and holders of perpetual capital securities and
existing Upper Tier
2 securities in priority of claims.
A change in UOB's VR will have an impact on the securities
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-'
+65 6796 7239
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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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