OREANDA-NEWS. Fitch Ratings has assigned Fondo de Reestructuracion Ordenada Bancaria's (FROB) EUR520m bond a Long-term local currency rating of 'BBB+'.

KEY RATING DRIVERS
The 'BBB+' rating reflects the explicit, irrevocable and unconditional guarantee provided by the Kingdom of Spain (BBB+/Stable). The EUR520m bond will have a bullet maturity in April 2017 and final conditions were published in the Spanish official bulletin on 13 April 2015. The Bank of Spain will act as paying agent under an agreement dated 22 September 2009. The bond issue is zero risk weighted and is European Central Bank repo-eligible.

The Fund for the Orderly Restructuring of the Banking Sector is an institution under public law with its own legal personality whose aim is to manage credit institution restructuring and resolution processes. The FROB was created in 2009 and is now regulated by Law 9/2012 of 14 November 2012 on the restructuring and resolution of credit institutions.

The guarantee falls under the EUR27bn guarantee programme referenced in the Ministerial Order (EUR12.5bn available after this bond issue). The issue will also be supported by the General Secretary of the Treasury and Financial Policy's acknowledgment that it is covered under the state's guarantee programme, as required under the Ministerial Order.

The purpose of this bond issue is to provide financial support to Catalunya Banc in the sale of a loan portfolio as part of the entity's resolution.

RATING SENSITIVITIES
The bonds are guaranteed by the Kingdom of Spain. Any changes in the ratings of the guarantor will automatically be reflected in the rating of the bonds. The bond issue could be downgraded in case of a change in the guarantee.