(The following statement was released by the rating agency)
Dec 11 - Fitch Ratings has affirmed Banco CAM S.A.U.’s (Banco CAM) Long-term Issuer Default Ratings (IDR) at ‘BB+', Short-term IDR at‘B’ and Support Rating at ‘3’. Fitch has simultaneously withdrawn the ratings following a corporate reorganisation whereby Banco CAM has been merged into Banco de Sabadell (Sabadell; ‘BB+'/Stable). At the same time, Banco CAM’s senior and subordinated lower Tier 2 debt issues have been affirmed, as they have been assumed by Sabadell.
RATING ACTION RATIONALE - IDRs AND SUPPORT RATING
The rating actions are based on the completion of the integration process of Banco CAM into its parent bank, Sabadell on 8 December 2012. As a result, Banco CAM’s assets and liabilities have been transferred to Sabadell. Banco CAM has ceased to exist as a separate legal entity. Banco CAM’s IDRs have been driven solely by parental support since its acquisition by Sabadell on 1 June 2012.
The upgrades of upper Tier 2 and preferred stock to ‘B’ from ‘B-’ and ‘B-’ from ‘CCC’ reflect a relatively higher probability of them being performing in the future following the transfer to Sabadell. These are notched down from Sabadell’s Viability Rating (VR) of ‘bb+', in line with the agency’s assessment of each instrument’s risk of non-performance and relative loss severities. The upper Tier 2 is notched down twice for loss severity and twice for non-performance risk. The preferred stock is notched down twice for loss severity and three times for non-performance risk.
The ratings of the state-guaranteed debt issues by Banco CAM, which have also been transferred to Sabadell, are in line with the Long-term IDR of Spain (‘BBB’/Negative) and are thus sensitive to any change in this rating.
The rating actions on Banco CAM are as follows:
Long-term IDR: affirmed at ‘BB+', Outlook Stable; rating withdrawn
Short-term IDR: affirmed at ‘B’; rating withdrawn
Support Rating: affirmed at ‘3’; rating withdrawn
Senior unsecured long-term debt: affirmed at ‘BB+'; transferred to Sabadell
Commercial paper and senior unsecured short-term debt: affirmed at ‘B’; transferred to Sabadell
Subordinated lower Tier 2 debt: affirmed at ‘BB’; transferred to Sabadell
Subordinated upper Tier 2 debt: upgraded to from ‘B’ from ‘B-'; transferred to Sabadell
Preferred Stock: upgraded to ‘B-’ from ‘CCC’; transferred to Sabadell
State-guaranteed debt: affirmed at ‘BBB’; transferred to Sabadell