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(The following statement was released by the rating agency) SYDNEY, January 23 (Fitch) Fitch Ratings has assigned a rating of âBBB+â on Bendigo and Adelaide Bank Limitedâs (BEN) Basel-III compliant Tier 2 instrument, which will be issued on 29 January 2014. The direct, unsecured and subordinated obligations will be denominated in Australian dollars and will be issued under BEN's AUD5bn Debt Instrument Programme. BENâs issue will be AUD300m in size, replacing a small amount of legacy Lower Tier 2 subordinated debt, which matured in 2013. The notes can be called after five years subject to regulatory approval by the Australian Prudential Regulatory Authority (APRA). Final maturity is 29 January 2024. The notes include a non-viability clause and will qualify as Tier 2 capital for the bank in accordance with APRAâs written requirement. KEY RATING DRIVERS & RATING SENSITIVITIES BENâs Tier 2 instrument is classified as subordinated debt and is rated one notch below its Viability Rating (VR) of âa-â to reflect its below-average recovery prospects relative to senior unsecured instruments. The notes will convert to equity in part or full should APRA consider this step necessary to maintain the bank's viability (that is, at the point of non-viability). If this is not possible, the notes would be written down in full or in part. The notes have been notched from the bank's VR. The agency believes no additional notching from the VR for non-performance is required to capture the point of non-viability as it is broadly the same as that expressed in the VR. BEN's total regulatory capital ratio was 10.71% at end-June 2013. The new issue is likely to increase the capital ratio by 98 basis points based on its June 2013 capital position. Under Fitch's methodology, the instrument does not qualify for any equity credit. BENâs subordinated debt ratings are broadly sensitive to the same considerations that might affect BENâs VR (see Rating Action Commentary dated 28 November 2013). Bendigo and Adelaide Bankâs ratings are as follows: Long-Term Issuer Default Rating (IDR): 'A-'; Outlook Stable; Short-Term IDR: 'F2'; Viability Rating: 'a-'; Support Rating: '3'; Support Rating Floor: 'BB'; Commercial Paper: âF2â; Long-Term senior unsecured debt: âA-â; Short-Term senior unsecured debt: âF2â; and Lower Tier 2 debt assigned: âBBB+â. Contact: Primary Analyst Andrea Jaehne Director +61 2 8256 0343 Fitch Australia Pty. Ltd., Level 15, 77 King Street, Sydney NSW 2000 Tim Roche Senior Director +61 2 8256 0310 Committee Chairperson Mark Young Managing Director +65 6796 7229 Media Relations: Iselle Gonzalez, Sydney, Tel: +61 2 8256 0326, Email: iselle.gonzalez@fitchratings.com. Additional information is available onwww.fitchratings.com Applicable criteria, âGlobal Financial Institutions Rating Criteriaâ, dated 15 August 2012 and âAssessing and Rating Bank Subordinated and Hybrid Securitiesâ, dated 5 December 2012 are available atwww.fitchratings.com. Applicable Criteria and Related Research: Global Financial Institutions Rating Criteriahttp://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686181 Assessing and Rating Bank Subordinated and Hybrid Securitieshttp://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=695542 Additional Disclosure Solicitation Statushttp://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=816490 ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S FREE WEB SITE AT 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. Fitch Australia Pty Ltd holds an Australian financial services licence (AFS licence no. 337123) which authorises it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001.
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Jan 23 (Reuters) - (The following statement was released by the rating agency)
Fitch Ratings has assigned a rating of aBBB+a on Bendigo and Adelaide Bank Limited
The direct, unsecured and subordinated obligations will be denominated in Australian dollars and will be issued under BEN's AUD5bn Debt Instrument Programme. BENas issue will be AUD300m in size, replacing a small amount of legacy Lower Tier 2 subordinated debt, which matured in 2013. The notes can be called after five years subject to regulatory approval by the Australian Prudential Regulatory Authority (APRA). Final maturity is 29 January 2024. The notes include a non-viability clause and will qualify as Tier 2 capital for the bank in accordance with APRAas written requirement.
KEY RATING DRIVERS & RATING SENSITIVITIES
BENas Tier 2 instrument is classified as subordinated debt and is rated one notch below its Viability Rating (VR) of aa-a to reflect its below-average recovery prospects relative to senior unsecured instruments. The notes will convert to equity in part or full should APRA consider this step necessary to maintain the bank's viability (that is, at the point of non-viability). If this is not possible, the notes would be written down in full or in part.
The notes have been notched from the bank's VR. The agency believes no additional notching from the VR for non-performance is required to capture the point of non-viability as it is broadly the same as that expressed in the VR. BEN's total regulatory capital ratio was 10.71% at end-June 2013. The new issue is likely to increase the capital ratio by 98 basis points based on its June 2013 capital position.
Under Fitch's methodology, the instrument does not qualify for any equity credit.
BENas subordinated debt ratings are broadly sensitive to the same considerations that might affect BENas VR (see Rating Action Commentary dated 28 November 2013).
Bendigo and Adelaide Bankas ratings are as follows:
Long-Term Issuer Default Rating (IDR): 'A-'; Outlook Stable;
Short-Term IDR: 'F2';
Viability Rating: 'a-';
Support Rating: '3';
Support Rating Floor: 'BB';
Commercial Paper: aF2a;
Long-Term senior unsecured debt: aA-a;
Short-Term senior unsecured debt: aF2a; and
Lower Tier 2 debt assigned: aBBB+a.
((Bangalore Ratings Team, Hotline: +91 80 6677 2513, Bhanu.priya@thomsonreuters.com, Group id: BangaloreRatings@thomsonreuters.com, Reuters Messaging: Bhanu.Priya.reuters.com@reuters.net))
Keywords: Fitch Rates Bendigo and Adelaide Bank's Basel III