Announcement follows confirmation of parent bank's ratings
Madrid, October 26, 2012 -- Moody's Investors Service has today confirmed the Ba1 long-term
debt and deposit ratings of Banco Santander Totta S.A. (BST),
the senior subordinated debt of (P)Ba2 and its junior subordinated debt
of (P)Ba3, and assigned a negative outlook. BST's BFSR
of D-/ba3 and its short-term debt and deposit ratings of
Not-Prime remain unchanged.
In addition, the (P)Ba1 senior unsecured MTN, (P)Ba2 subordinate
MTN and (P)Ba3 junior subordinate MTN ratings of Banco Santander Totta
S.A., London have been confirmed at their current
levels.
For additional information on bank ratings, please refer to the
webpage containing Moody's related announcements http://www.moodys.com/eusovereign.
RATINGS RATIONALE
RATINGS RATIONALE FOR CONFIRMING THE Ba1/(P)Ba2/(P)Ba3 RATINGS
Today's announcement follows the confirmation of the parent bank's
(Banco Santander S.A.) ratings at Baa2/Prime-2/C-
(equivalent to a baa2 standalone credit assessment), with a negative
outlook (please see "Moody's concludes rating reviews on majority
of Spanish banks after sovereign rating confirmation", published
on 24 October 2012 and available on moodys.com), which in
turn was prompted by the confirmation of the Spanish government's ratings
with a negative outlook (please see "Moody's confirms Spain's government
bond rating at Baa3/(P)P-3, assigns negative outlook",
published on 16 October 2012 and available on moodys.com,
for more information).
BST's long-term debt and deposit ratings currently incorporate
two-notches of rating uplift from the ba3 standalone credit assessment,
reflecting Moody's assessment of a high probability of parental support
in case of need.
The bank's BFSR of D-/ba3 and its short-term debt
and deposit ratings of Not-Prime remain unchanged at their current
levels.
WHAT COULD MOVE THE RATINGS UP / DOWN
BST's BFSR could be negatively affected by (i) the failure to accomplish
targeted deleveraging and recapitalisation plans; (ii) a significant
deterioration of its liquidity position; (iii) a greater-than-expected
deterioration of the economy that would exert additional pressure on the
bank's profitability, asset quality and capital levels; and/or
(iv) a relaxation of its risk-management practices.
BST's long-term debt and deposit ratings could be downgraded
following a downgrade of its parent bank's standalone credit strength,
or if there are signs of a lower probability of support from Banco Santander.
In addition, Moody's says that the ratings could be downgraded if
the Portuguese government's rating, currently Ba3 with a negative
outlook, is further downgraded or if BST's standalone BFSR is also
downgraded.
Upwards ratings pressure on BST's standalone ratings is unlikely as it
will be difficult to have a higher standalone rating than the Portuguese
sovereign, given its exposure to the Portuguese operating environment
and given the difficulty to disconnect BST's credit profile from
the credit profile of the Portuguese government in view of the multiple
interdependencies between the government and a purely domestically focused
bank.
METHODOLOGY
The principal methodology used in these ratings was Moody's Consolidated
Global Bank Rating Methodology published in June 2012. Please see
the Credit Policy page on www.moodys.com for a copy of this
methodology.
Headquartered in Lisbon, Portugal, BST reported total audited
consolidated assets of EUR40.2 billion assets as of 30 June 2012.
REGULATORY DISCLOSURES
For ratings issued on a program, series or category/class of debt,
this announcement provides relevant 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 relevant regulatory disclosures in relation
to the rating action on the support provider and in relation to each particular
rating action for securities that derive their credit ratings from the
support provider's credit rating. For provisional ratings,
this announcement provides relevant 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.
The ratings have been disclosed to the rated entities or their designated
agent(s) and issued with no amendment resulting from that disclosure.
Information sources used to prepare each of the ratings are the following:
parties involved in the ratings, public information, and confidential
and proprietary Moody's Investors Service information.
Moody's considers the quality of information available on the rated entities,
obligations or credits satisfactory for the purposes of issuing these
ratings
Moody's adopts all necessary measures so that the information it uses
in assigning the ratings 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.
Moody's Investors Service may have provided Ancillary or Other Permissible
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the two years preceding the credit rating action. Please see the
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the lead rating analyst and to the Moody's legal entity that has
issued the rating.
Maria Jose Mori
Vice President - Senior Analyst
Financial Institutions Group
Moody's Investors Service Espana, S.A.
Calle Principe de Vergara, 131, 6 Planta
Madrid 28002
Spain
JOURNALISTS: 44 20 7772 5456
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Johannes Wassenberg
MD - Banking
Financial Institutions Group
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
Releasing Office:
Moody's Investors Service Espana, S.A.
Calle Principe de Vergara, 131, 6 Planta
Madrid 28002
Spain
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
Moody's confirms Banco Santander Totta's ratings, assigns negative outlook
