April 20, 2017 / 1:12 AM / 4 months ago

Fitch Assigns Final 'A' Ratings to Bank of China's MTN Notes

(The following statement was released by the rating agency) TAIPEI/HONG KONG, April 19 (Fitch) Fitch Ratings has today assigned Bank of China Ltd.'s (BOC) long-term notes issued under its USD30 billion medium-term note (MTN) programme final long-term ratings of 'A'. The rated notes comprise: Issued by Macau branch - USD750 million 2.875% notes due 2022 - USD300 million 3.5% notes due 2027 Issued by Dubai branch - USD650 million floating rate notes due 2020 Issued by Sydney Branch - AUD800 million floating rate notes due 2022 Issued by Johannesburg Branch - CNY1.5 billion 4.88% notes due 2020 Issued by Bank of China (Luxembourg) S.A. and guaranteed by BOC's Luxembourg branch - EUR500 million floating rate notes due 2020 The notes issued by the above branches and subsidiary will be listed on the Hong Kong Stock Exchange and the proceeds will be used for general corporate purposes. The final ratings on the notes are in line with the expected ratings assigned on 9 April 2017 and follow the receipt of documents conforming to information previously received. BOC increased the size of its MTN programme to USD30 billion from USD20 billion on 7 April 2017 to meet the bank's funding needs. The MTN programme was first rated 'A'/'F1' by Fitch on 9 December 2013, and subsequently affirmed on 2 June 2016. KEY RATING DRIVERS The branches in Macau, Dubai, Sydney, Johannesburg and Luxembourg are part of the same legal entity, BOC. Therefore, these notes issued under the MTN programme represent direct, unconditional, unsecured and unsubordinated obligations of BOC, and are rated in line with BOC's Long-Term Issuer Default Rating (IDR) of 'A'. The bank's IDR is underpinned by the agency's expectations of an extremely high probability of support from the Chinese government in the event of stress. The 'A' rating assigned to the notes issued from the BOC Johannesburg branch is higher than the country ceiling of 'BBB-' for South Africa, underpinned by our expectation of full support from the bank's headquarters to the branch, if required. The MTN programme contains a cross-default clause, whereby a default on any notes exceeding USD25m will accelerate the repayment of other tranches. Hence, we believe the likelihood of BOC allowing a default on notes issued by its Johannesburg branch to be remote, as this would bring substantial reputational damage to the bank. Moreover, Fitch is not aware of any restrictions on how notes issued by the Johannesburg branch are to be repaid. That means BOC would be expected to utilise resources from within its global branch network to meet obligations due to noteholders. Therefore, our view is that the Country Ceiling (which captures transfer and convertibility risks) for South Africa will not constrain the rating assigned to the notes issued by BOC's Johannesburg branch. RATING SENSITIVITIES Any changes to ratings of these notes will be directly correlated with changes in BOC's IDR, which will in turn reflect any shift in the perceived willingness or ability of China's government to support BOC in a full and timely manner. Contact: Primary Analyst Katie Chen Director +886 2 8175 7614 Fitch Australia Pty Ltd, Taiwan Branch Suite 1306, 13/F 205 Tun Hwa North Road Taipei 105, Taiwan Secondary Analyst Grace Wu Senior Director +852 2263 9919 Committee Chairperson Tim Roche Senior Director +61 2 8256 0310 Date of the Relevant Committee: 1 June 2016 Media Relations: Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: wailun.wan@fitchratings.com. Additional information is available on www.fitchratings.com Applicable Criteria Global Bank Rating Criteria - Effective from 20 March 2015 to 15 July 2016 (pub. 20 Mar 2015) here Additional Disclosures Dodd-Frank Rating Information Disclosure Form here Solicitation Status here#solicitation Endorsement Policy here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. DIRECTORS AND SHAREHOLDERS RELEVANT INTERESTS ARE AVAILABLE here. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Copyright © 2017 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch’s factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third- party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch’s ratings and reports should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating or a report will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings and its reports, Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings and forecasts of financial and other information are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings and forecasts can be affected by future events or conditions that were not anticipated at the time a rating or forecast was issued or affirmed. The information in this report is provided “as is” without any representation or warranty of any kind, and Fitch does not represent or warrant that the report or any of its contents will meet any of the requirements of a recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and reports made by Fitch are based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating or a report. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at any time for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of the United Kingdom, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers. For Australia, New Zealand, Taiwan and South Korea only: Fitch Australia Pty Ltd holds an Australian financial services license (AFS license no. 337123) which authorizes it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below