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Fitch Rates Credit Agricole S.A.'s Tier 2 Contingent Capital Notes 'BBB-(EXP)'
August 29, 2013 / 4:06 PM / in 4 years

Fitch Rates Credit Agricole S.A.'s Tier 2 Contingent Capital Notes 'BBB-(EXP)'

(The following statement was released by the rating agency) PARIS/LONDON, August 29 (Fitch) Fitch Ratings has assigned Credit Agricole S.A.'s (A/Stable/F1) Tier 2 Contingent Capital notes a 'BBB-(EXP)' expected rating. 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 Credit Agricole's (A/Stable/F1/a) consolidated common equity Tier 1 (CET1) ratio. Credit Agricole is not a single entity, but a cooperative banking group. Its 39 regional banks (caisses regionales) and central body (Credit Agricole S.A.) benefit from a cross-support mechanism. Accordingly, Credit Agricole and Credit Agricole S.A.'s Issuer Default Ratings are at the same level. The notes are rated four notches below Credit Agricole's 'a' Viability Rating (VR) in accordance with Fitch's criteria for "Assessing and Rating Bank Subordinated and Hybrid Securities" dated 5 December 2012 at The notes are notched twice for loss severity to reflect the principal write-down feature, and twice for non-performance risk, to reflect the high incremental risk due to the 7% CET1 ratio trigger compared with the risk reflected in the bank's VR. Fitch has assigned 50% equity credit to the notes for calculating Credit Agricole's Fitch eligible capital ratio. This reflects the fact that the notes are not perpetual but with a long maturity (20 years), subordinated to all senior creditors and the permanent and full write-down occurs well before the bank would become non-viable, given the high trigger of 7%. RATING SENSITIVITIES As the notes are notched from Credit Agricole's VR, their rating is primarily sensitive to any change in this rating. Contact: Primary Analyst Alain Branchey Senior Director +33 1 44 29 91 41 Fitch France S.A.S. 60 rue de Monceau 75008 Paris Secondary Analyst Sonia Trabelsi Director +33 1 44 29 91 29 Committee Chairperson Eric Dupont Senior Director +33 1 44 29 91 31 Media Relations: Francoise Alos, Paris, Tel: +33 1 44 29 91 22, Email:; Hannah Huntly, London, Tel: +44 20 3530 1153, Email: Additional information is available on Applicable criteria, "Assessing and Rating Bank Subordinated and Hybrid Securities", dated 5 December 2012, "Rating Criteria for Banking Structures Backed by Mutual Support Mechanisms" dated 20 December 2012 and "Global Financial Institutions Rating Criteria," dated 15 August 2012, are available at Applicable Criteria and Related Research: Assessing and Rating Bank Subordinated and Hybrid Securities here Rating Criteria for Banking Structures Backed by Mutual Support Mechanisms 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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