OREANDA-NEWS. Fitch Ratings has assigned Banco de Credito Social Cooperativo S. A.'s (BCC) upcoming subordinated notes an expected rating of 'B+(EXP)'.

The assignment of the final rating is contingent on the receipt of final documents conforming to the information already received.

BCC is part of Grupo Cooperativo Cajamar (GCC), which also comprises 19 credit cooperatives, and is subject to a mutual support mechanism under which members mutualise 100% of profits and have a cross-support mechanism for solvency and liquidity. On this basis, Fitch assigns the same Issuer Default Ratings (IDRs) to the group members and uses GCC's VR as the starting point for BCC's subordinated debt rating.

KEY RATING DRIVERS

SUBORDINATED DEBT

The subordinated notes are notched down one notch from GCC's Viability Rating (VR) of 'bb-' for loss severity because of lower recovery expectations relative to senior unsecured debt. These securities are subordinated to all senior unsecured creditors.

RATING SENSITIVITIES

SUBORDINATED DEBT

The subordinated notes' expected rating is sensitive to changes in GCC's VR, which drives BCC's Long-Term IDR. The rating is also sensitive to a widening of notching if Fitch's view of the probability of non-performance on the bank's subordinated debt relative to the probability of the group failing, as measured by its VR, increases or if Fitch's view of likely recovery changes. The rating is also sensitive to any changes in the mutual support mechanism within the group that would result in us concluding that risk of BCC's non-performance is no longer best reflected by GCC's VR.