Fitch assigns high rating to BPI notes
Philippine Daily Inquirer
First Posted 03:59:00 11/26/2008
Filed Under: Debt Markets, Banking, Ratings
Global credit watchdog Fitch Ratings has assigned an AA+ national long-term rating to Bank of the Philippines Islands’ offering of subordinated notes qualifying as tier 2, or supplementary, capital worth up to P15 billion.
BPI, which is raising tier-2 capital for the first time, plans to issue 10-year notes, which will be subordinated to claims of depositors and other creditors but senior to share capital.
In a statement, Fitch Ratings said the AA+ rating was a notch below BPI’s national long-term rating of AAA, which it assigned last Nov. 11.
AAA national rating is the highest rating assigned in Fitch’s national rating scale for a particular country but it is not comparable to international ratings. This grade is assigned to the “best” credit risk relative to all other issuers or issues in the same country and is usually assigned to all financial commitments issued or guaranteed by the sovereign state.
BPI has disclosed that net proceeds of its maiden issue of tier 2 notes will be used for acquisition and other potential opportunities. The bank is interested in acquiring Philippine American Life and General Insurance Co., the largest insurance company in the Philippines.
“In the event the acquisition materializes, Fitch believes that BPI, given its historically conservative record, will take the necessary steps to restore its credit profile, particularly its strong capital position by raising various capital instruments, including the proposed sub-notes,” Fitch said. Doris C. Dumlao; with editing by INQUIRER.net
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