Mexico, November 11, 2020 -- Moody's de Mexico, ("Moody's") has today affirmed the Ba1/Not Prime
long- and short-term local and foreign currency deposit
ratings of Deutsche Bank Mexico, S.A. (Deutsche Bank
Mexico) and the Ba1/Not Prime long- and short -term issuer
ratings of Deutsche Securities Mexico, S.A. de C.V.
(Deutsche Securities Mexico), following the affirmation of its ba2
Baseline Credit Assessment (BCA). The outlook on the ratings was
changed to stable from negative, in line with the change in outlook
to stable, from negative, on Deutsche Bank A.G.'s
ratings (DB, A3/A3 stable; ba1), which is the Mexican
subsidiaries' parent company. (see "Moody's affirms
Deutsche Bank AG's ratings, changes outlook to stable¨ https://www.moodys.com/research/--PR_434379)
The following ratings and assessments were affirmed:
Deutsche Bank Mexico, S.A. (600069090):
Baseline credit assessment of ba2
Adjusted baseline credit assessment of ba1
Long-term global local currency deposit rating of Ba1,
outlook changed to Stable from Negative
Long-term global foreign currency deposit rating of Ba1
outlook changed to Stable from Negative
Long-term Mexican National Scale deposit rating of A1.mx
Short-term Mexican National Scale deposit rating of MX-1
Long- and short-term Counterparty Risk Assessments
of Baa3(cr) and Prime-3(cr)
Short-term global local currency deposit rating of Not
Prime
Short-term global foreign currency deposit rating of Not
Prime
Deutsche Securities Mexico, S.A. de C.V.
(821503957):
Long-term global local currency issuer rating of Ba1
Long-term Mexican National Scale issuer rating of A1.mx
Short-term Mexican National Scale issuer rating of MX-1
Short-term global local currency issuer rating of Not Prime
Outlook action
Deutsche Bank Mexico, S.A. (600069090):
...The outlook changed to stable from negative
Deutsche Securities Mexico, S.A. de C.V.
(821503957):
...The outlook changed to stable from negative
RATINGS RATIONALE
Moody's affirmation of the ratings of Deutsche Bank Mexico and Deutsche
Securities Mexico incorporates the evaluation that the Mexican subsidiaries
will maintain their financial strength while the entities continue to
wind down activities, following the announcement that Deutsche Bank
Mexico has agreed to sell its trustee division to CIBanco, S.A.
Institución de Banca Múltiple (CI Banco). The ratings
reflect the limited risks arising from the Mexican subsidiaries'
highly liquid balance sheets and ample capitalization ratio, with
assets primarily invested in Mexican government securities and funded
mostly with the entities' own capital.
The Mexican subsidiaries will continue to operate until Deutsche Bank
Mexico completes the transfer of its remaining trustee division to other
financial institutions, and the shareholders of the subsidiaries
agrees on its liquidation and dissolution. The deposit and issuer
ratings benefit from affiliate support, as indicated by one notch
of uplift from its BCA, which reflects Moody's assessment
of a high likelihood of parental support from DB. Moody's expects
that DB would provide the necessary financial support to its Mexican subsidiaries
because the reputational cost for DB's global business of allowing these
entities to fail would likely outweigh the costs of bailing them out.
At the same time, the Mexican subsidiaries' stable outlook
are now in line with that of its parent. Finally, as a highly
integrated and harmonized entity, Deutsche Securities Mexico's ratings
are in line with those of Deutsche Bank Mexico.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook on the ratings reflects Moody's expectation that
the Mexican subsidiaries' operations will maintain their financial
standing as the liquidation process is underway. Positive rating
action on DB's baseline credit assessment (BCA) could add positive
pressure to the subsidiaries' deposit ratings.
Conversely, Deutsche Bank Mexico's BCA could be downgraded if the
bank's capital declines significantly. The subsidiaries'
supported ratings could also be downgraded if the ratings of the parent,
currently on stable outlook, were to be downgraded.
The long-term Mexican National Scale ratings of A1.mx indicate
issuers or issues with above-average creditworthiness relative
to other domestic issuers. The short- term Mexican National
Scale ratings of issuers rated MX-1 indicate the strongest ability
to repay short-term senior unsecured debt obligations relative
to other domestic issuers.
The principal methodology used in rating Deutsche Bank Mexico, S.A.
was Banks Methodology published in November 2019 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1147865.
The principal methodology used in rating Deutsche Securities Mexico,
S.A. de C.V. was Securities Industry Market
Makers Methodology published in November 2019 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1187332.
Alternatively, please see the Rating Methodologies page on www.moodys.com.mx
for a copy of these methodologies.
The period of time covered in the financial information used to determine
Deutsche Bank Mexico, S.A.'s rating is between 1 January
2017 and 30 September 2020 (source: Moody's, as well as issuer's
annual audited and quarterly unaudited financial statements).
The period of time covered in the financial information used to determine
Deutsche Securities Mexico, S.A. de C.V.'s
rating is between 1 January 2017 and 30 September 2020 (source:Moody's,
as well as issuer's annual audited and quarterly unaudited financial statements
).
Moody's National Scale Credit 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 credit 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 ".za"
for South Africa. For further information on Moody's approach to
national scale credit ratings, please refer to Moody's Credit rating
Methodology published in May 2016 entitled "Mapping National Scale Ratings
from Global Scale Ratings". While NSRs have no inherent absolute
meaning in terms of default risk or expected loss, a historical
probability of default consistent with a given NSR can be inferred from
the GSR to which it maps back at that particular point in time.
For information on the historical default rates associated with different
global scale rating categories over different investment horizons,
please see https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1216309.
REGULATORY DISCLOSURES
For further specification of Moody's key rating assumptions and
sensitivity analysis, see the sections Methodology Assumptions and
Sensitivity to Assumptions in the disclosure form. Moody's
Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.
Information sources used to prepare the rating are the following:
parties involved in the ratings, parties not involved in the ratings,
public information, and confidential and proprietary Moody's
information.
The ratings have been disclosed to the rated entity prior to public dissemination.
A general listing of the sources of information used in the rating process,
and the structure and voting process for the rating committees responsible
for the assignment and monitoring of ratings can be found in the Disclosure
tab in www.moodys.com.mx.
The date of the last Credit Rating Action for Deutsche Bank Mexico,
S.A. was 16/04/2019.
The date of the last Credit Rating Action for Deutsche Securities Mexico,
S.A. de C.V. was 16/04/2019.
For ratings issued on a program, series, category/class of
debt or security this announcement provides certain regulatory disclosures
in relation to each rating of a subsequently issued bond or note of the
same series, category/class of debt, security 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 credit rating action on the
support provider and in relation to each particular credit rating action
for securities that derive their credit ratings from the support provider's
credit rating. For further information please see the ratings tab
on the issuer/entity page for the respective issuer on www.moodys.com.mx.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this credit rating action,
and whose ratings may change as a result of this credit 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.
This credit rating is subject to upgrade or downgrade based on future
changes in the financial condition of the Issuer/Security, and said
modifications will be made without Moody's de México S.A.
de C.V accepting any liability as a result.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
Moody's general principles for assessing environmental, social
and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1133569.
Moody's considers the quality of information available on the rated entity,
obligation or credit satisfactory for the purposes of issuing a rating.
Moody's adopts all necessary measures so that the information it uses
in assigning a rating is of sufficient quality and from sources Moody's
considers to be reliable including, when appropriate, independent
third-party sources. However, Moody's is not an auditor
and cannot in every instance independently verify or validate information
received in the rating process.
Please see Moody's Rating Symbols and Definitions on www.moodys.com.mx
for further information on the meaning of each rating category and the
definition of default and recovery.
Please see ratings tab on the issuer/entity page on www.moodys.com.mx
for the last rating action and the rating history. The date on
which some ratings were first released goes back to a time before Moody's
ratings were fully digitized and accurate data may not be available.
Consequently, Moody's provides a date that it believes is the most
reliable and accurate based on the information that is available to it.
Please see our website www.moodys.com.mx for further
information.
Please see www.moodys.com.mx for any updates on changes
to the lead rating analyst and to the Moody's legal entity that has issued
the rating.
The ratings issued by Moody's de Mexico are opinions regarding the credit
quality of securities and/or their issuers and not a recommendation to
invest in any such security and/or issuer.
Please see the ratings tab on the issuer/entity page on www.moodys.com.mx
for additional regulatory disclosures for each credit rating.
Rodrigo Marimon Bernales
Analyst
Financial Institutions Group
JOURNALISTS: 1 800 666 3506
Client Service: 1 212 553 1653
M. Celina Vansetti-Hutchins
MD - Banking
Financial Institutions Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
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