NEW YORK--(BUSINESS WIRE)--Following the upgrade of Peru's sovereign ratings and country ceiling, Fitch Ratings has taken rating actions on various Peruvian banks as follows:
Cofide:
--Long-term foreign currency Issuer Default Rating (IDR) upgraded to 'BBB' from 'BBB-';
--Short-term foreign currency IDR upgraded to 'F2' from 'F3';
--Long-term local currency IDR upgraded to 'BBB+' from 'BBB';
--Short-term local currency IDR upgraded to 'F2' from 'F3';
--Support Floor rating upgraded to 'BBB' from 'BBB-';
--Support rating affirmed at '2'.
Banco de la Nacion (BdN):
--Long-term foreign currency IDR upgraded to 'BBB' from 'BBB-';
--Short-term foreign currency IDR upgraded to 'F2' from 'F3';
--Long-term local currency IDR upgraded to 'BBB+' from 'BBB';
--Short-term local currency IDR upgraded to 'F2' from 'F3';
--Support Floor rating upgraded to 'BBB' from 'BBB-';
--Support rating affirmed at '2'.
Scotiabank Peru (SBP):
--Long-term foreign currency IDR upgraded to 'BBB+' from 'BBB';
--Long-term local currency IDR upgraded to 'A' from 'A-';
--Short-term foreign currency IDR affirmed at 'F2';
--Short-term local currency IDR affirmed at 'F1';
--Support rating affirmed at '2'.
BBVA Continental (BC):
--Long-term foreign currency IDR upgraded to 'BBB+' from 'BBB';
--Long-term local currency IDR upgraded to 'A' from 'A-';
--Short-term foreign currency IDR affirmed at 'F2';
--Short-term local currency IDR affirmed at 'F1';
--Support rating affirmed at '2'.
The Rating Outlook for Cofide, BdN, and SBP is Stable. The Outlook for BC's foreign currency IDR is Stable, but the Outlook for its Local Currency IDR is Negative.
In addition, Fitch has upgraded the ratings of the following entities, whose securities achieve a pass-through rating from BC:
--Continental Trustees (Cayman) Ltd (CTCL), senior secured loan participation notes to 'BBB+' from 'BBB';
--Continental Senior Trustees (Cayman) Ltd (CSTC), senior secured loan participation notes to 'BBB+' from 'BBB';
Fitch upgraded Peru's sovereign rating to 'BBB' citing its robust macroeconomic performance and the reduced uncertainty about the continuity of economic policies. (For additional information refer to Fitch's press release dated Nov. 10, 2011.)
The IDRs of Cofide and Banco de la Nacion were upgraded in line with those of the Republic of Peru which owns and is expected to support these entities, should the need arise. The IDRs and support floors reflect Peru's strengthened ability to support these entities that are strategic for the government's economic policy and are expected to move in line with Peru's sovereign ratings, hence the Stable Outlook.
Scotiabank Peru's IDRs were upgraded following the upgrade of Peru's IDRs and country ceiling. The ratings reflect the support that it would receive from its parent, the Bank of Nova Scotia (rated 'AA-', Outlook Stable). Given the strategic importance of SBP to BNS' regional strategy, support for SBP should be forthcoming absent a severe deterioration of the operating environment which Fitch considers unlikely. The foreign currency IDR is deemed constrained by the country ceiling.
BC's IDRs were also upgraded following the upgrade of Peru's IDRs and country ceiling. The ratings reflect the support that it would receive from its key stakeholder, BBVA (rated 'A+', Outlook Negative). Given BC's integration to its parent, its performance and prospects, support from BBVA should be forthcoming - absent a systemic risk event. However, as the operating environment in Peru remains sound, while uncertainty persists in its parent's core markets, the local currency IDR is at a point where it has become vulnerable in case BBVA's IDR is downgraded. Accordingly, the foreign currency IDR is deemed constrained by the country ceiling hence its Outlook is Stable, but the local currency IDR could be downgraded should the rating of BBVA be downgraded, hence, it bears a Negative Outlook in line with that of its parent.
The rating of CSTC was upgraded in line with BBVA Continental's foreign currency long-term IDR which is constrained by the country ceiling.
The rating of CTCL was upgraded in line with BBVA Continental's local currency long-term IDR and is notched two notches to reflect its junior subordinated nature.
Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
Applicable Criteria and Related Research:
--'Global Financial Institutions Rating Criteria' (Aug. 16, 2010).
Applicable Criteria and Related Research:
Global Financial Institutions Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=649171
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