MOODY'S RAISES RATINGS OF THE PREFERRED SHARES OF BANCO SANTANDER AND BANCO BILBAO VIZCAYA TO 'a1' and 'aa3', RESPECTIVELY
London, 05-14-98 -- Moody's Investors Service raised its ratings on the non-cumulative preferred stock of Banco Bilbao Vizcaya, S.A. to "aa3" from "a1", and of Banco Santander, S.A. to"a1" from "a2". Moody's said that these upgrades reflect its view that these institutions' financial strength has reduced the additional credit risks associated with such instruments.
According to the rating agency, unlike debt ratings, preferred stock ratings are intended to measure the relative risk that the issuing company will be unable or unwilling to meet its obligations for timely payment of dividends. Moody's added that a characteristic of non-cumulative preferred securities is the provision, in certain circumstances, for the issuer to suspend payment of dividends without the obligation to make these payments at a later date. Such a provision can have negative credit implications, which are reflected where appropriate in these instruments' rating level. However, in view of BBV's and Banco Santander's financial strength, the likelihood of such a dividend suspension is sufficiently remote, said Moody's, to warrant the "aa3" and the "a1" rating, respectively.
The following preferred stock ratings were raised:
Bank To From Existing Deposit Ratings and FSR of guarantor
Banco Bilbao Vizcaya Int.'l. (Gibraltar) Ltd. "aa3" "a1" Aa2/Prime-1/B+
Santander Overseas Bank "a1" "a2" Aa3/Prime-1/B
Santander Finance Ltd. "a1" "a2" Aa3/Prime-1/B
Banco Bilbao Vizcaya, S.A. headquartered in Bilbao (Spain) had total assets of Ptas. 21 trillion (approximately $140 billion) in December 1997. Banco Santander, S.A. headquartered in Santander (Spain) had total assets of Ptas. 26 trillion ($170 billion) in December 1997.
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