Fitch Affirms Banca Privada d'Andorra; Withdraws Ratings
OREANDA-NEWS. Fitch Ratings has affirmed Banca Privada d'Andorra's (BPA) Long-and Short-term Issuer Default Ratings (IDRs) at 'Default' (D). Simultaneously, the agency has withdrawn BPA's ratings as the bank is under resolution. Accordingly, Fitch will no longer provide ratings or analytical coverage of BPA. A full list of rating actions is available at the end of this rating action commentary.
KEY RATING DRIVERS
IDRS AND VR
The affirmation and withdrawal follow the approval of BPA's resolution by the Andorran Resolution Authority (AREB) in accordance with the Restructuring of Financial Entities 8/2015 Law.
In accordance with the law, the AREB defined the terms and conditions for the transfer of assets and liabilities of BPA's eligible customers to Vall Banc. BPA's customers underwent an independent review of anti-money laundering and around 93% of them, representing around 68% of business volume, will be transferred to the new bank in the coming weeks. The rest will remain at BPA and will either be probed for licitness and moved to another bank or reported to the Unitat d'Inteligencia Financera d'Andorra, the Andorran state's independent body in charge of promoting and coordinating prevention measures of money laundering and terrorism finance. BPA's equity and subordinated debt holders will be subject to bail-in to absorb the losses arising from the valuation conducted under the resolution scenario.
Vall Banc was created in June 2015 and has been sold to J.C. Flowers for a total price of up to EUR29m, after a competitive sale process, started in October. The bank has been capitalised by an injection of EUR30m from the recapitalisation fund, FAREB.
The rating actions are as follows:
Long-term IDR affirmed at 'D'; withdrawn
Short-term IDR affirmed at 'D'; withdrawn
Viability Rating affirmed at 'f'; withdrawn
Support Rating affirmed at '5'; withdrawn
Support Rating Floor affirmed at 'No Floor'; withdrawn