OREANDA-NEWS. Fitch Ratings has affirmed UniCredit Bank Austria AG's (Bank Austria; BBB+/Stable/bbb+) senior unsecured notes at 'BBB+' and removed them from Rating Watch Evolving (RWE). It has laso assigned the bank's EUR40bn EMTN programme a Long-term rating of 'BBB+' and a Short-term rating of 'F2'.

KEY RATING DRIVERS - SENIOR UNSECURED NOTES
The affirmation of the senior unsecured debt rating reflects the announcement on 14 December 2015 by Bank Austria's parent, Unicredit SpA (UC, BBB+/Stable/bbb+), that Bank Austria will not sell its domestic retail business. Instead, it will retain these activities, continue to operate the portfolio on its balance sheet and scale it back significantly in the medium term.

We had placed Bank Austria's senior debt rating on Rating Watch Evolving (RWE) on 20 November 2015 to reflect the possibility that some outstanding senior notes could be sold together with the Austrian retail portfolio. The RWE reflected our view that, if a sale of the domestic retail business had been concluded and some notes transferred to the buyer, these notes' rating would then be driven by the credit profile of the buyer, which could have been stronger, similar or weaker than Bank Austria's 'BBB+'.

KEY RATING DRIVERS - EMTN PROGRAMME
The EMTN programme's ratings are equalised with the bank's Issuer Default Ratings (IDRs) because they apply only to senior unsecured issuance under the programme. The ratings are assigned to the programme and not to the notes issued under the programme. There is no assurance that notes issued under the programme will be assigned a rating, or that the rating assigned to a specific issue under the programme will be the same as the rating assigned to the programme.

RATING SENSITIVITIES - SENIOR UNSECURED NOTES
The senior unsecured notes' rating is equalised with Bank Austria's Long-term IDR and is subject to the same sensitivities. Bank Austria's IDRs are equalised with, and are thus subject to the same sensitivities as UC's IDRs. A change to UC's IDRs would trigger a corresponding change to Bank Austria's IDRs.

In addition, a scenario in which UC would no longer consider the downsized Bank Austria as core to its strategy could trigger a notching of Bank Austria's Long-term IDR from that of UC, potentially by several notches. However, we view this scenario as unlikely in the foreseeable future.

RATING SENSITIVITIES - EMTN PROGRAMME
The EMTN programme's ratings are subject to the same sensitivities of Bank Austria's IDRs.