June 12, 2013 / 7:57 PM / in 5 years

Fitch: Capital Raise and Acquisition of Generali's Stakes Rating Neutral for GFNorte & Subs

(The following statement was released by the rating agency) MONTERREY/NEW YORK, June 12 (Fitch) Grupo Financiero Banorte, S.A.B. de C.V. (GFNorte; rated 'BBB'/'F2' by Fitch with a Stable Outlook) announced yesterday that it would acquire Assicurazioni Generali S.p.A.'s (Generali) 49% stake in its insurance and annuities subsidiaries. Earlier today the company announced plans to raise up to USD3 billion in new capital. These events are in line with Fitch's previously disclosed assumptions and expectations and, therefore, have no impact on the ratings of GFNorte and/or its subsidiaries. Fitch affirmed GFNorte's and its subsidiaries' ratings upon the announcement of the purchase of Afore Bancomer (see the Fitch Rating Actions Commentaries dated March 22, 2013 and Dec. 11, 2012, available at www.fitchratings.com), while the Rating Outlook remained Stable. The Stable Outlook of GFNorte's ratings reflects Fitch's expectation for a gradual rebuilding of capital metrics to pre-acquisition levels. In Fitch's view, the acquisition of Generali's stake in the insurance and annuities businesses is strategically positive for GFNorte, as it could gradually drive an improvement in the performance of these entities and on the group's overall revenue diversification. The completion of this transaction does not have rating implications for Seguros Banorte Generali, S.A. de C.V. (national-rating of 'AA+(mex)' with a Stable Outlook), since potential support from Generali has not been factored in. Instead, the rating of the insurance company considers the likelihood of potential support from GFNorte, if needed. In turn, Fitch considers that the planned capital increase is aligned with GFNorte's strategy to restore capital adequacy metrics to the levels recorded before the acquisition of Afore Bancomer. Fitch believes that the proceeds of the planned capital raise will allow GFNorte to afford the acquisition of Generali's stakes, to purchase the International Finance Corporation's small stake in GFNorte's major subsidiary, Banco Mercantil del Norte, S.A. (Banorte; rated 'BBB'/'F2' with a Stable Outlook), and also to liquidate the credit facility contracted earlier this year to complete the purchase of Afore Bancomer. Upon completion of the capital injection, Fitch expects GFNorte's double leverage to be virtually eliminated, while any excess capital raised could further improve the overall loss absorption capacity of Banorte. Contact: Primary Analyst (GFNorte and Banorte) Monica Ibarra Director +52 81 8399 9150 Fitch Mexico SA de CV Prol. Alfonso Reyes 2612, Edificio Connexity Piso 8 Col. Del Paseo Residencial 64920 Monterrey, N.L., Mexico Primary Analyst (Seguros Banorte Generali) Milena Carrizosa +57 1 326 9999 Ext.1090 Calle 69A No. 9-85 Bogota, Colombia Secondary Analyst (GFNorte and Banorte) Alejandro Garcia, CFA Senior Director +52 81 8399 9146 Secondary Analyst (Seguros Banorte Generali) Eduardo Recinos Senior Director +503 2516 6606 Media Relations: Elizabeth Fogerty, New York, Tel: +1 (212) 908 0526, Email: elizabeth.fogerty@fitchratings.com. Additional information is available at 'www.fitchratings.com'. 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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