New York, June 07, 2019 -- Moody's Investors Service has today affirmed the debt ratings of five
Mexican banks, and changed their outlooks to negative from stable.
These actions follow the change in the outlook to negative, from
stable, on Mexico's government bond rating of A3, on 5 June
2019. For additional information, please refer to the related
announcement: "Moody's changes Mexico's outlook to negative from
stable; affirms A3 ratings."
Specifically, Moody's changed the outlooks and affirmed the senior
unsecured debt ratings of BBVA Bancomer, S.A. Texas
Agency (BBVA Bancomer), Banco Santander México, S.A.
(Santander México), Banco Mercantil del Norte, S.A.
(Cayman I), Nacional Financiera, S.N.C.
(Nafin), and Banco Nacional de Comercio Exterior, SNC (CI)
(Bancomext). The above issuers' other ratings were unaffected by
today's action.
The following ratings were affirmed:
BBVA Bancomer, S.A. Texas Agency
.Long-term global local currency senior unsecured debt rating
of A3, outlook changed to negative from stable
Banco Santander México, S.A.
.Long-term global foreign currency senior unsecured debt
rating of A3, outlook changed to negative from stable
Banco Mercantil del Norte, S.A.(Cayman I)
.Long-term global foreign currency senior unsecured debt
rating of A3, outlook changed to negative from stable
Nacional Financiera, S.N.C.
.Long-term global foreign currency senior unsecured debt
rating of A3, outlook changed to negative from stable
Banco Nacional de Comercio Exterior, SNC (CI)
.Long-term global foreign currency senior unsecured debt
rating of A3, outlook changed to negative from stable
.Outlook, changed to negative from stable on the following
issuers:
..BBVA Bancomer, S.A. Texas Agency
..Banco Mercantil del Norte, S.A.(Cayman
I)
..Banco Nacional de Comercio Exterior, SNC (CI)
RATINGS RATIONALE
The rating actions on the five banks were prompted by the change in outlook
to negative, from stable, on Mexico's bond rating of A3,
which Moody's uses to assess the government's capacity to provide extraordinary
financial support to financial institutions in an event of stress.
All the affected issuers' ratings benefit from an implicit expectation
or explicit promise of support from the government.
Moody's decision to change the outlook to negative on Mexico's A3
ratings reflects the rating agency's concern that the policy framework
is weakening in two key respects, with negative implications for
growth and debt. First, unpredictable policymaking is undermining
investor confidence and medium-term economic prospects.
Second, lower growth, together with changes to energy policy
and the role of Petróleos Mexicanos (Pemex, Baa3),
introduce risks to Mexico's medium-term fiscal outlook,
notwithstanding the government's near-term commitment to
prudent fiscal policy.
In addition to its capacity, the likelihood of government support
is also a function of its willingness to provide such support.
Moody's continues to assess a very high willingness from the government
to provide support to the affected issuers. In the cases of BBVA
Bancomer Banorte and Santander México, this is based on their
importance to the country's payment system and considerable deposit market
shares of 21.0%, 13.3% and 13.7%,
respectively, as of March 2019. In addition, this assessment
considers the authorities' history of providing support when needed and
the relatively small size of the banking system relative to GDP,
which would make bailing out the banking system, should it ever
be necessary, more affordable for the government.
For Nafin and Bancomext, the assessment of the government's willingness
to provide support as very high considers the commitment by the government
to fulfil the banks' financial obligations, as stated by law.
This statutory support reflects the banks' status as arms of the government
and their important public policy roles. However, the statutes
do not represent blanket guarantees, and hence do not qualify as
credit substitution according to Moody's methodology because they (i)
only benefit Mexican and foreign institutions and Mexican individuals,
but not non-Mexican individuals; and (ii) do not explicitly
commit the government to timely payment. Notwithstanding these
carve outs to its legal obligations, Moody's nevertheless believes
the government is very likely to support all the banks' creditors,
including foreign individuals should there be any, and to ensure
timely payment of the banks' obligations.
WHAT COULD CHANGE THE RATING -- DOWN/UP
The current negative outlook on the ratings mean that upward rating pressure
is unlikely at this time. On the other hand, if Mexico's
government bond rating faces downward pressures again in the future,
the affected global scale ratings would be negatively pressured as well.
The principal methodology used in rating BBVA Bancomer, S.A.
Texas Agency, Banco Santander Mexico, S.A.,
and Banco Mercantil del Norte, S.A.(Cayman I) was
Banks published in August 2018. The principal methodologies used
in rating Banco Nacional de Comercio Exterior, SNC (CI) amd Nacional
Financiera, S.N.C. were Banks published in
August 2018, and Government-Related Issuers published in
June 2018. Please see the Rating Methodologies page on www.moodys.com
for a copy of these methodologies.
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.
The below contact information is provided for information purposes only.
Please see the ratings tab of the issuer page at www.moodys.com,
for each of the ratings covered, Moody's disclosures on the
lead rating analyst and the Moody's legal entity that has issued
the ratings.
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.
Jose Angel Montano
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: 1 888 779 5833
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
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
