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Rating Action:

Moody's assigns B3/Baa1.ar debt ratings to Banco de la Ciudad de Buenos Aires's Classes IX and X senior notes

 The document has been translated in other languages

25 Nov 2016

Buenos Aires City, November 25, 2016 -- Moody's Latin America Agente de Calificación de Riesgo (MLA) has today assigned a B3 global local currency senior unsecured debt rating and a Baa1.ar Argentina national scale senior debt rating to Banco de la Ciudad de Buenos Aires S.A. (Ciudad)'s Class IX and Class X senior unsecured debt issuances . The notes will be due 2020 and 2024, respectively, and will be issued under Ciudad's existing multi-currency senior unsecured program of $500 million, and up to ARS 1,000 million total issued amount. The outlook on Banco de la Ciudad de Buenos Aires' senior unsecured debt rating is stable.

The following ratings were assigned to Banco de la Ciudad de Buenos Aires's Class IX and Class X local currency senior unsecured notes:

Global local currency senior unsecured debt rating of B3; stable outlook

Argentinean national scale local currency senior debt rating of Baa1.ar, stable outlook

RATINGS RATIONALE

Ciudad's B3 rating incorporates Argentina's operating environment, which remains challenging despite the country's recent return to global capital markets and various other market-friendly policy reforms implemented in recent months by the new administration. The rating acknowledges Ciudad's traditional retail-banking franchise in the city of Buenos Aires, experienced management team, and strong financial fundamentals. The bank's solid capitalization and largely core funded operation, positions it well to support future portfolio expansion. In September 2016, Moody's tangible common equity ratio stood at 11.32%.

With a good track record of disciplined risk guidelines, Ciudad's nonperforming loan ratio reached 1.68% of total loans in 3Q16, in line with industry level of 1.7% , while reserve buffers of 1.52% of total loans, are still low compared to peers in Argentina. As a government-owned bank, Ciudad is focused on providing products and services to public servants of the city of Buenos Aires, a strategy which generates recurring earnings , supported by the low risk loan mix that helps to reduce credit costs, lean operational structure and low-cost funding profile.

The Baa1.ar national scale local-currency deposit and debt ratings are positioned at the top of the range of available options for B3 rated issuers, to reflect the relative strength of Ciudad when compared to other B3 rated local banks. All ratings have a stable outlook is in line with the outlook on Argentina's sovereign bond rating.

WHAT COULD CHANGE THE RATING UP/DOWN

As the rating is effectively capped by the Argentine sovereign's B3 rating due to the strong credit links between the sovereign and the bank, an upgrade of the sovereign rating accompanied by continued improvement in operating conditions could put positive pressures on Ciudad's ratings, provided the bank maintains a disciplined approach to loan growth. Ciudad could face downward ratings pressure if the operating environment deteriorates and the sovereign rating is downgraded or if the bank suffers a substantial deterioration in its asset quality, earnings, and capitalization.

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

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_189530.

Banco de la Ciudad de Buenos Aires is headquartered in Buenos Aires, with assets of ARS 70.88 billion ($4.65 billion) and equity of ARS 7.35 billion ($481.67 million) as of 30 September 2016.

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.ar.

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.

For issuers domiciled in Argentina, the regulatory report related to this rating action is available on www.moodys.com.ar.

Please see www.moodys.com.ar 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.ar for additional regulatory disclosures for each credit rating.

Ceres Lisboa
Senior Vice President
Financial Institutions Group
Moody's America Latina Ltda.
Avenida Nacoes Unidas, 12.551
16th Floor, Room 1601
Sao Paulo, SP 04578-903
Brazil
JOURNALISTS: 800-891-2518
SUBSCRIBERS: 55-11-3043-7300

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

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

No Related Data.
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