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Rating Action:

Moody's assigns Aa3 to Banco de Chile's Japanese Yen senior notes

Global Credit Research - 29 Dec 2016

New York, December 29, 2016 -- Moody's Investors Service today assigned a long-term foreign currency senior unsecured debt rating of Aa3, to Banco de Chile's JPY 10 billion issuance of five-year fixed-rate senior unsecured notes, maturing on 29 December 2021. The outlook on the rating is stable.

The notes are being issued under Banco de Chile's USD3 billion global medium-term note program.

The following rating was assigned to Banco de Chile's five-year JPY 10 billion fixed-rate senior unsecured notes, due 29 December 2021:

Long-term foreign currency senior unsecured debt rating: Aa3, stable outlook

RATINGS RATIONALE

Banco de Chile's Aa3 foreign currency senior unsecured debt rating incorporates the bank's standalone baseline credit assessment (BCA) of a3 and Moody's view of a very high probability that the bank's bondholders and depositors will receive government support in a situation of financial stress because of its very large deposit and loan franchises and the material systemic consequences of an unsupported failure. The rating benefits from three notches of uplift from its a3 BCA, at the same level as Moody's Aa3 government bond rating for Chile, with a stable outlook.

Banco de Chile's BCA also considers the increased risks to the bank's earnings and asset quality stemming from prospects of continued slowdown in Chile's economy and relevant market shifts that have changed the competitive landscape. Notwithstanding these challenges, Banco de Chile will continue to be among the most highly rated banks in Latin America, benefitting from Chile's still solid macro fundamentals and institutional framework, as well as a diversified loan portfolio, solid risk management and leading market shares that will continue to sustain ample margins.

WHAT COULD CHANGE THE RATING

Upward movement is limited at this time because Banco de Chile's deposit and senior debt ratings are already rated at the same level as the Chilean government.

Further downward ratings pressure would accumulate if asset quality deteriorates more than currently anticipated, resulting in sustained challenges to the bank's earnings generation and capitalization.

The last rating action on Banco de Chile was on 12 December 2016.

The principal methodology used in this rating was Banks published in January 2016. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

Headquartered in Santiago, Chile, as of September 2016 and on a consolidated basis Banco de Chile reported CLP31.0 trillion (USD46.8 billion) in total assets, CLP25.0 trillion in gross loans, CLP18.2 trillion in deposits, CLP2.9 trillion in shareholders' equity and CLP428.2 billion in net income.

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 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 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 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.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

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.

Felipe Carvallo
Vice President - Senior Analyst
Financial Institutions Group
Moody's de Mexico S.A. de C.V
Ave. Paseo de las Palmas
No. 405 - 502
Col. Lomas de Chapultepec
Mexico, DF 11000
Mexico
JOURNALISTS: 001-888-779-5833
SUBSCRIBERS:52-55-1253-5700

M. Celina Vansetti
MD - Banking
Financial Institutions Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moody's Investors Service, Inc.
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New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

No Related Data.
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