June 18, 2014 / 3:52 PM / in 4 years

Fitch Assigns Nykredit Realkredit's Contingent Capital Notes 'BBB' Final Rating

(The following statement was released by the rating agency) LONDON/PARIS, June 18 (Fitch) Fitch Ratings has assigned Nykredit Realkredit A/S's (A/Stable/F1) EUR600m fixed-rate resettable contingent capital notes due 2036 a final rating of 'BBB'. The final rating is in line with the 'BBB(EXP)' expected rating Fitch assigned to the notes on 19 May 2014 (see "Fitch Assigns Nykredit Realkredit's Contingent Capital Notes 'BBB(EXP)' Expected Rating'' at www.fitchratings.com). KEY RATING DRIVERS The notes are subordinated Tier 2 instruments without a coupon deferral feature and subject to a 7% capital adequacy trigger. On breach of the trigger, the notes will be automatically written down to zero and the notes cancelled, resulting in loss of principal and future interest for investors. The capital adequacy trigger is based on Nykredit Realkredit A/S's individual or consolidated (the "Nykredit Realkredit Group") common equity Tier 1 (CET1) ratio or Nykredit Holding A/S's consolidated CET1 ratio. The notes are rated three notches below Nykredit Realkredit A/S's 'a' Viability Rating (VR) in accordance with Fitch's criteria for "Assessing and Rating Bank Subordinated and Hybrid Securities". The notes are notched twice for loss severity to reflect the principal write-down feature and once for non-performance risk. The latter reflects moderate incremental risk due to the 7% CET1 ratio trigger, which is partly offset by the large capital buffer above this trigger point, compared with the risk reflected in the bank's VR. The notes have been assigned an equity credit of 50%. RATING SENSITIVITIES - IDRS, NATIONAL RATINGS AND SENIOR DEBT As the notes are notched from Nykredit Realkredit A/S's VR, their rating is primarily sensitive to any change in this rating. The notes' rating is also sensitive to a wider notching if Fitch changes its assessment of the probability of the notes' non-performance risk relative to the risk captured in Nykredit Realkredit A/S's VR. Contact: Primary Analyst Jens Hallen Senior Director +44 20 3530 1326 Fitch Ratings Limited 30 North Colonnade London E14 5GN Secondary Analyst Olivia Perney Guillot Senior Director +33 144 299 174 Committee Chairperson James Longsdon Managing Director +44 20 3530 1076 Media Relations: Elaine Bailey, London, Tel: +44 203 530 1003, Email: Elaine.Bailey@fitchratings.com; Hannah Huntly, London, Tel: +44 20 3530 1153, Email: hannah.huntly@fitchratings.com. Additional information is available on www.fitchratings.com Applicable criteria, "Assessing and Rating Bank Subordinated and Hybrid Securities", dated 31 January 2014, and "Global Financial Institutions Rating Criteria," dated 31 January 2014, are available at www.fitchratings.com. Applicable Criteria and Related Research: Assessing and Rating Bank Subordinated and Hybrid Securities Criteria here 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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