(The following statement was released by the rating agency)
LONDON/BARCELONA/MILAN, April 28 (Fitch) Fitch Ratings has
upgraded Instituto de
Credito Oficial's (ICO) Long-term Issuer Default Rating (IDR) to
'BBB' and revised its Support Rating Floor (SRF) to 'BBB+' from
Outlook on ICO's Long-term IDR is Stable. At the same time, the
affirmed the Short-term IDR at 'F2' and the Support Rating at
'2'. A full list
of rating actions is available at the end of this rating action
The agency has also upgraded ICO's Long-term programme ratings
and its Long-term
senior debt to 'BBB+', its market linked securities to
'BBB+(emr)' while its
Short-term programme ratings and commercial paper issues have
been affirmed at
The rating action follows the upgrade of Spain's sovereign
'BBB+'/Stable from 'BBB'/Stable on 25 April 2014 (see Fitch
Upgrades Spain to
'BBB+'; Outlook Stable on www.fitchratings.com).
KEY RATING DRIVERS - IDRS, SR, SRF AND SENIOR DEBT
ICO's IDRs and senior debt ratings are equalised with those of
shareholder, the Spanish government (BBB+/Stable/F2) and are
based on our view
that there is a high probability that ICO would receive support
from the Spanish
sovereign if needed. Spain has provided a guarantee for all debt
incurred by ICO when raising funds. This guarantee is explicit,
unconditional and direct.
ICO's ratings reflect its role as a policy bank that provides
longer-term lending to the private and public sector to promote
social development in Spain. Lending is driven by the Spanish
policies. The Spanish government appoints ICO's CEO, sets the
annual debt limits and exercises control over its operations.
In addition to its ordinary lending activity, ICO supported
communities by refinancing their debt maturities in 2012 and
contributed to a
special purpose fund established to pay the arrears of local
2014, ICO aims to expand the offer of import-export facilities
to more Spanish
companies and act as a catalyst for venture capital investments
in Spain. In
Fitch's view ICO is of high strategic importance to the state
and no other bank
can currently replace ICO's role as the state's financial arm.
Under Spanish law, the government is committed to maintain ICO's
1 ratio above 9.5%. At end-2013, the ratio was considerably
higher at 19.7%,
which demonstrates the government's commitment to keep the bank
The Stable Outlook reflects that on Spain's Long-term IDR.
Fitch does not assign a Viability Rating to ICO as its business
entirely dependent on the support of its state guarantor.
RATING SENSITIVITIES - IDRS, SR, SRF AND SENIOR DEBT
ICO's IDRs, Support Rating, Support Rating Floor and senior debt
based on Spain's ratings and are therefore primarily sensitive
to changes in the
sovereign rating. ICO's ratings are also sensitive to changes in
strategic importance to the government, which Fitch currently
does not expect.
The rating actions are as follows:
Long-term IDR upgraded to 'BBB+' from 'BBB'; Outlook Stable
Short-term IDR affirmed at 'F2'
Support Rating affirmed at '2'
Support Rating Floor revised to 'BBB+' from 'BBB'
Long-term programme and long-term senior debt upgraded to 'BBB+'
Market-linked securities upgraded to 'BBB+emr' from 'BBBemr'
Short-term programme and commercial paper affirmed at 'F2'
+34 93 323 8405
Fitch Ratings Espana, S.A.U.
Paseo de Gracia 85, 7th Floor
+39 02 87 90 87 201
+ 44 20 3530 1012
Media Relations: Hannah Huntly, London, Tel: +44 20 3530 1153,
Additional information is available on www.fitchratings.com
Applicable criteria, 'Global Financial Institutions Rating
Criteria' dated 31
January 2014, are available on www.fitchratings.com.
Applicable Criteria and Related Research:
Global Financial Institutions Rating Criteria
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