06.02.2015, 14:04
Fitch Rates Westpac's CNY1.25bn Sub Debt
OREANDA-NEWS. Fitch Ratings has assigned a rating of 'A+' to Westpac Banking Corporation's (Westpac, AA-/Stable) CNY1.25bn Basel-3 compliant Tier-2 instrument, due to be issued on 9 February 2015.
The fixed rate notes are direct, unsecured and subordinated. Its final maturity is 9 February 2025, although an earlier redemption in February 2020 and each interest payment date thereafter is possible, subject to prior written approval by the Australian Prudential Regulation Authority (APRA). The notes include a non-viability clause and will qualify as regulatory Tier-2 capital for Westpac.
KEY RATING DRIVERS & RATING SENSITIVITIES
The instrument is classified as subordinated debt and is rated one notch below Westpac's Viability Rating (VR) of 'aa-' to reflect its below-average recovery prospects compared to senior unsecured instruments. The notes would convert to equity in part or in full should APRA notify Westpac in writing that without the conversion or a public sector capital injection, Westpac would become non-viable. The notes would be written off in part or in full should Westpac be unable to convert the notes to equity within five business days of the trigger event date. No additional notching from the VR for non-performance is applied as the VR already captures the point of non-viability. Under Fitch's methodology, the instrument does not qualify for any equity credit.
Westpac's subordinated debt ratings are broadly sensitive to the same considerations that might affect the bank's VR (see Rating Action Commentary dated 17 June 2014).
This issue is the second Basel-3 compliant Tier-2 instrument by an Australian bank into the Dim Sum bond market within the first six weeks of 2015. The issuance reflects the growing importance of the Dim Sum market as well as the Australian banks' desire to diversify their funding sources and investors.
The fixed rate notes are direct, unsecured and subordinated. Its final maturity is 9 February 2025, although an earlier redemption in February 2020 and each interest payment date thereafter is possible, subject to prior written approval by the Australian Prudential Regulation Authority (APRA). The notes include a non-viability clause and will qualify as regulatory Tier-2 capital for Westpac.
KEY RATING DRIVERS & RATING SENSITIVITIES
The instrument is classified as subordinated debt and is rated one notch below Westpac's Viability Rating (VR) of 'aa-' to reflect its below-average recovery prospects compared to senior unsecured instruments. The notes would convert to equity in part or in full should APRA notify Westpac in writing that without the conversion or a public sector capital injection, Westpac would become non-viable. The notes would be written off in part or in full should Westpac be unable to convert the notes to equity within five business days of the trigger event date. No additional notching from the VR for non-performance is applied as the VR already captures the point of non-viability. Under Fitch's methodology, the instrument does not qualify for any equity credit.
Westpac's subordinated debt ratings are broadly sensitive to the same considerations that might affect the bank's VR (see Rating Action Commentary dated 17 June 2014).
This issue is the second Basel-3 compliant Tier-2 instrument by an Australian bank into the Dim Sum bond market within the first six weeks of 2015. The issuance reflects the growing importance of the Dim Sum market as well as the Australian banks' desire to diversify their funding sources and investors.
Комментарии