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TEXT-Fitch rates Banrisul subordinated notes 'BB-'
November 26, 2012 / 3:25 PM / 5 years ago

TEXT-Fitch rates Banrisul subordinated notes 'BB-'

Nov 26 - Fitch Ratings assigns Banco do Estado do Rio Grande do Sul's
 (Banrisul) reopening subordinated notes a rating of 'BB-'.

The reopening will be for an amount that will be set at the time of the issuance
with a tenor for approximately 10 years with a maturity date of January 2022;
interest payments will be made semi-annually. The notes will carry a fixed
interest rate to be defined. The net proceeds will be used by Banrisul for
general corporate purposes.

The notes will rank at least equally with similar subordinated debt and carry a
cumulative coupon deferral mechanism that can be exercised. This deferral would
only occur if Banrisul is in noncompliance with its regulatory capital
requirement. As per Fitch's new rating criteria, the rating of this Tier II
subordinated debt should be two notches below Banrisul's Viability Rating (VR)
of 'bb+', one notch reflecting loss severity features and its subordinated
status and one notch due to the moderate risk of non-performance.

Banrisul's VR considers its regional importance, with strong franchise in its
home state of Rio Grande do Sul (RS), above-average profitability, adequate
liquidity, and stable retail funding structure. The VR also reflects its
moderate credit quality, modest nationwide market share, fierce competition in
the domestic banking sector, a rather undiversified funding structure and risk
concentration on RS, Brazil's fourth largest state, whose economy is largely
focused on the agricultural sector.

Controlled by the State of Rio Grande do Sul, Banrisul is the largest bank
within the state with prevalent market share in credits and deposits. With 462
branches, Banrisul operates as a retail bank, focusing on companies and

Additional information is available at ''.

Applicable Criteria and Related Research:
--'Global Financial Institutions Rating Criteria' (Aug. 15, 2012);
--'Rating Bank Regulatory Capital and Similar Securities' (Dec. 15, 2011);
--'Banco do Estado do Rio Grande do Sul S.A. - Banrisul', Update (June 19,
--'Fitch Expects to Rate Banrisul's Tier II USD Subordinated Notes 'BB-(exp)'
(Jan. 19, 2012).

Applicable Criteria and Related Research:
Global Financial Institutions Rating Criteria
Rating Bank Regulatory Capital and Similar Securities
Banco do Estado do Rio Grande do Sul -- Banrisul

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