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Fitch Rates National Bank of Greece's Subordinated Notes Final 'CCC-'
17 JUL 2019 04:17 AM ET
Fitch Ratings-Barcelona-17 July 2019: Fitch Ratings has assigned National Bank of Greece, S.A.'s (NBG) issue of EUR400 million subordinated notes due 2029 a final rating of 'CCC-'/'RR6'.
The final rating is in line with the expected rating Fitch assigned to the notes on 11 July 2019 (see "Fitch Rates National Bank of Greece's Subordinated Notes 'CCC-(EXP)'" at www.fitchratings.com).
KEY RATING DRIVERS
The 'CCC-'/'RR6' long-term rating on NBG's subordinated Tier 2 notes is notched down twice from the bank's Viability Rating (VR) of 'ccc+'. The 'RR6' Recovery Rating reflects poor recovery prospects. Fitch applies zero notches for additional non-performance risk relative to the VR as the notes' loss-absorption is triggered only at the point of non-viability, and two notches for loss severity. The latter reflects our view that the layer of subordinated debt is thin relative to the size of the bank's potential problem (reflected in the bank's very high volume of unreserved non-performing exposures (NPEs)).
RATING SENSITIVITIES
NBG's subordinated debt rating is sensitive to changes in the bank's VR. It may also be upgraded if unreserved NPEs become less significant relative to the layer of subordinated debt, either through an increase in the amount of equity or through a significant reduction of unreserved NPEs
17 JUL 2019 04:17 AM ET
Fitch Ratings-Barcelona-17 July 2019: Fitch Ratings has assigned National Bank of Greece, S.A.'s (NBG) issue of EUR400 million subordinated notes due 2029 a final rating of 'CCC-'/'RR6'.
The final rating is in line with the expected rating Fitch assigned to the notes on 11 July 2019 (see "Fitch Rates National Bank of Greece's Subordinated Notes 'CCC-(EXP)'" at www.fitchratings.com).
KEY RATING DRIVERS
The 'CCC-'/'RR6' long-term rating on NBG's subordinated Tier 2 notes is notched down twice from the bank's Viability Rating (VR) of 'ccc+'. The 'RR6' Recovery Rating reflects poor recovery prospects. Fitch applies zero notches for additional non-performance risk relative to the VR as the notes' loss-absorption is triggered only at the point of non-viability, and two notches for loss severity. The latter reflects our view that the layer of subordinated debt is thin relative to the size of the bank's potential problem (reflected in the bank's very high volume of unreserved non-performing exposures (NPEs)).
RATING SENSITIVITIES
NBG's subordinated debt rating is sensitive to changes in the bank's VR. It may also be upgraded if unreserved NPEs become less significant relative to the layer of subordinated debt, either through an increase in the amount of equity or through a significant reduction of unreserved NPEs
