October 19, 2017 / 7:09 PM / 2 months ago

Fitch Affirms BICSA's L-T IDR at 'BB'; Outlook Stable

(The following statement was released by the rating agency) MONTERREY, October 19 (Fitch) Fitch Ratings has affirmed Banco Internacional de Costa Rica, S.A.'s (BICSA) Long- and Short-Term Foreign Currency Issuer Default Ratings (IDRs) at 'BB' and 'B', respectively, following the downgrade of Banco de Costa Rica's (BCR; BICSA's main shareholder) Viability Rating (VR) and the affirmation of its support-driven IDRs. The Rating Outlook of the long-term ratings is Stable. BICSA's National scale and support ratings were also affirmed, while no rating action has been taken on the VR. A full list of rating actions follows at the end of this release. KEY RATING DRIVERS IDRS, National-Scale and Support Ratings BICSA's IDRs are driven by the support it would receive, if needed, from its shareholders. BICSA is a subsidiary of both BCR and Banco Nacional de Costa Rica (BNCR), which own 51% and 49% of BICSA, respectively. Fitch believes that BICSA is core to its parents given the significant role that the bank plays to its owners' regional objectives, and the shared reputational risk given their integration. Therefore, the ratings of BICSA are equalized with its parents'. The affirmation of the bank's Support Rating reflects Fitch's view that the probability of support remains unchanged. BCR's and BNCR's long-term IDRs of 'BB'/Outlook Stable are support-driven an equalized to the Costa Rican sovereign in view of an explicit guarantee. Fitch believes that the parent's IDRs reflect their ability to support BICSA. In 2016, BICSA received support from both BCR and BNCR to face liquidity concerns at that time, in the form of temporary deposits and asset sales. Also, both banks have active representatives in BICSA's board of directors and other operative committees. RATING SENSITIVITIES IDRS, National-Scale and Support Ratings As the IDRs, Support, and national-scale ratings are driven by the support of BCR and BNCR, any changes in the ratings of its parents would result in similar actions to BICSA's respective ratings. The IDRs and support ratings could be downgraded if Fitch perceives a diminished strategic importance of the bank to its parents, or if the capacity or willingness for support changes. National-scale ratings are local relativities of creditworthiness and, therefore, could potentially change depending on how BICSA's IDRs compare to other rated entities in Panama. The rating actions are as follows: Fitch has affirmed the following ratings: --Foreign currency Long-Term IDR at 'BB'; Outlook Stable; --Foreign currency Short-Term IDR at 'B'; --Support Rating at '3'; --National Long-Term Rating at 'A+(pan)'; Outlook Stable; --National Short-Term Rating at 'F1(pan)'; --Senior unsecured debt National Long-Term Rating at 'A+(pan)'; --Senior unsecured debt National Short-Term Rating at 'F1(pan)'. No action was taken on the following ratings: --Viability Rating of 'b+'. Contact: Primary Analyst Ricardo Aguilar Associate Director +52 81 83999124 Fitch Ratings Prol. Alfonso Reyes 2612, Edificio Connexity Piso 8 Col. Del Paseo Residencial 64920 Monterrey, N.L., Mexico Secondary Analyst Mario Hernandez Associate Director +503 2516-6614 Committee Chairperson Alejandro Garcia Managing Director +1-212-908-9137 Adjustment to Financial Statements: Intangibles, deferred tax assets and other deferred assets were deducted from the Fitch Core Capital, as Fitch believes those are non-loss absorbing assets. Media Relations: Benjamin Rippey, New York, Tel: +1 646 582 4588, Email: benjamin.rippey@fitchratings.com. Additional information is available on www.fitchratings.com Applicable Criteria Global Bank Rating Criteria (pub. 25 Nov 2016) here National Scale Ratings Criteria (pub. 07 Mar 2017) here Additional Disclosures Dodd-Frank Rating Information Disclosure Form here Solicitation Status here#solicitation Endorsement Policy here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. 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