New York, January 29, 2020 -- Moody's Investors Service ("Moody's") has today upgraded
Banco Nacional de Comercio Exterior, S.N.C.'s
(Bancomext) Tier 2 subordinated capital notes to Baa3 (hyb), from
Ba1 (hyb), issued through the bank's Cayman Islands branch,
Banco Nacional de Comercio Exterior, SNC (CI) (Bancomext CI).
At the same time, Moody's affirmed the A3 senior debt ratings of
Nacional Financiera, S.N.C. (Nafin) and Bancomext CI, as well as the (P)A3 certificate of deposit (CD) program
rating of Nafin's London branch, Nacional Financiera,
S.N.C., London Branch (Nafin London).
The following rating was upgraded:
Banco Nacional de Comercio Exterior, SNC (CI)
- Long-term foreign currency subordinated debt rating,
to Baa3(hyb), from Ba1(hyb)
The following ratings were affirmed:
Banco Nacional de Comercio Exterior, SNC (CI)
- Long-term global foreign currency senior unsecured debt
rating of A3, negative outlook
Nacional Financiera, S.N.C.
- Long-term global foreign currency senior unsecured debt
rating of A3, negative outlook
Nacional Financiera, S.N.C., London Branch
- Long-term global local and foreign currency CD program
rating of (P)A3
- Short-term global local and foreign currency CD program
rating of (P)Prime-2
RATINGS RATIONALE
UPGRADE OF BANCOMEXT CI'S SUBORDINATED DEBT
Moody's has upgraded Bancomext CI's Tier 2 subordinated capital
notes to Baa3(hyb), from Ba1(hyb), because of the upgrade
to ba2, from ba3, of Bancomext's baseline credit assessment
(BCA) (see Moody's press release titled "Moody's affirms
Banobras, Nafin, and Bancomext's ratings; upgrades
BCAs of Banobras and Bancomext" http://www.moodys.com/viewresearchdoc.aspx?docid=PR_417624).
The Baa3(hyb) rating reflects the incremental probability of default of
the notes absent of extraordinary support from the Mexican government,
which is the bank's shareholder, relative to other financial
obligations of Bancomext. This is because the notes have interest
deferral provisions tied to high capitalization thresholds, as well
as a higher loss given default reflecting the subordination of the notes
to other claims of the bank.
AFFIRMATION OF SENIOR RATINGS
Moody's affirmed the senior debt ratings of Bancomext CI and Nafin,
as well as Nafin London's certificates of deposit, in line
with the rating agency's assumption of a very high government support
for the two development banks based on each banks' law.
Moody's assumes the government will support the banks' obligations
with creditors and ensure timely payment of the banks' obligations.
Consequently, the ratings and outlooks of Bancomext CI and Nafin
are in line with Mexico's sovereign rating and outlook.
WHAT COULD CHANGE RATINGS UP/DOWN
The development banks' senior ratings have limited upward pressure
because their ratings are already at the level of the sovereign rating.
However, their rating outlooks would be stabilized if Mexico's sovereign
rating outlook is stabilized.
Bancomext CI's subordinated debt rating could benefit from sustained
improvements in bank's capitalization, profitability and liquidity
buffers.
The development banks' senior ratings could be downgraded if the
Mexican government bond rating is downgraded.
Bancomext CI's subordinated debt rating could face downward pressure
in case of a higher than expected deterioration in their asset quality
and capitalization. However, this would not affect the development
bank's senior debt ratings, given our assessment of government
support.
Moody's believes Nafin and Bancomext's exposure to environmental
risks is low, consistent with its general assessment for the global
banking sector. The banks' exposure to social risks is moderate,
consistent with Moody's general assessment for the global banking sector.
As well, governance risks are largely internal rather than externally
driven. Moody's does not have any particular concerns with the
two development bank's governance, and does not apply any
corporate behavior adjustment to the banks.
The methodologies used in these ratings were Banks Methodology published
in November 2019, 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, 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 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
Felipe Carvallo
VP - Senior Credit Officer
Financial Institutions Group
JOURNALISTS: 1 888 779 5833
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
