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Rating Action:

Moody's rates Banco Hipotecario del Uruguay's bonds Aaa.uy

Global Credit Research - 06 May 2013

Buenos Aires City, May 06, 2013 -- Moody's Investors Service assigned a (P)Baa2 global local currency senior debt rating to Banco Hipotecario del Uruguay's Senior Debt Program for an amount up to UR 7 million (Unidades Reajustables), that as of today equal Ur 4,554.62 million. At the same time, on the Uruguayan National Scale, Moody's Latin America assigned an Aaa.uy national scale local currency debt rating to the program. Moody's Investors Service also assigned a Baa2 global local currency senior debt rating to the first and second takedowns under the program, which will be due in 20 and 8 years, respectively. Combined, the expected issuances should not exceed UI 800 million (Unidades Indexadas), which as of today equal Ur 2,079.92 million. On the National Scale, Moody's Latin America rated both expected issuances Aaa.uy local currency debt rating.

The outlook on all ratings is stable.

The following ratings were assigned to Banco Hipotecario del Uruguay:

UR 7 million senior unsecured debt program:

(P)Baa2 Global Local Currency Debt Rating

Aaa.uy Uruguayan National Scale Local Currency Debt Rating

UI 800 million senior unsecured debt issuance:

Baa2 Global Local Currency Debt Rating

Aaa.uy Uruguayan National Scale Local Currency Debt Rating

UI 800 million senior unsecured debt issuance:

Baa2 Global Local Currency Debt Rating

Aaa.uy Uruguayan National Scale Local Currency Debt Rating

RATINGS RATIONALE

Moody's explained that the local currency senior unsecured debt rating derives from BHU's Baa2 global local currency deposit rating. Moody's also noted that seniority was taken into consideration in the assignment of the debt ratings.

BHU is wholly owned by the Oriental Republic of Uruguay, which fully and unconditionally guarantees all of its obligations. Moody's incorporates such support in the bank's long-term local currency deposit ratings of Baa2, which is substantially higher than its stand-alone unsupported baseline credit assessment (BCA) of b3. The BCA maps directly from the bank financial strength rating of E+. The E+ is driven by the bank's modest financial condition, particularly its capitalization and asset quality, following the restructuring of its balance sheet that restored the bank's operational capabilities. BHU's restructuring included the transfer of a significant portion of non-performing loans to the National Housing Association (ANV) in the form of trusts, at the same time that expensive liabilities contracted with different banks and international organizations were taken over by its sole shareholder, the federal government. As a result, non-performing loans declined substantially, and the delinquency ratio reached 9.1% by end 2012, down from 36% in 2009. In addition, the bank received several capital injections improving substantially its capitalization profile.

Banco Hipotecario del Uruguay is headquartered in Montevideo, Uruguay, with assets of Ur$30.2 billion and equity of Ur$14 billion as of December 2012.

The principal methodology used in this rating was Moody's Consolidated Global Bank Rating Methodology published in June 2012. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

Moody's National Scale Ratings (NSRs) are intended as relative measures of creditworthiness among debt issues and issuers within a country, enabling market participants to better differentiate relative risks. NSRs differ from Moody's global scale ratings in that they are not globally comparable with the full universe of Moody's rated entities, but only with NSRs for other rated debt issues and issuers within the same country. NSRs are designated by a ".nn" country modifier signifying the relevant country, as in ".mx" for Mexico. For further information on Moody's approach to national scale ratings, please refer to Moody's Rating Methodology published in October 2012 entitled "Mapping Moody's National Scale Ratings to Global Scale Ratings".

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this rating action, and whose ratings may change as a result of this rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

María Valeria Azconegui
Asst Vice President - Analyst
Financial Institutions Group
Moody's Latin America
Ing. Butty 240
16th Floor
Buenos Aires City C1001AFB
Argentina
JOURNALISTS: (800) 666 -3506
SUBSCRIBERS: (5411) 5129 2600

Maria Celina Vansetti-Hutchins
MD - Banking
Financial Institutions Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moody's Latin America
Ing. Butty 240
16th Floor
Buenos Aires City C1001AFB
Argentina
JOURNALISTS: (800) 666 -3506
SUBSCRIBERS: (5411) 5129 2600

Moody's rates Banco Hipotecario del Uruguay's bonds Aaa.uy
No Related Data.

 

© 2013 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

 


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