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TEXT-S&P rates Banco Davivienda's new senior unsec. notes 'BBB-'
January 22, 2013 / 2:17 PM / 5 years ago

TEXT-S&P rates Banco Davivienda's new senior unsec. notes 'BBB-'

(The following statement was released by the rating agency)

Jan 22 - Standard & Poor's Ratings Services said today it assigned its 'BBB-' rating to Banco Davivienda S.A.'s (Davivenda; BBB-/Stable/A-3) senior unsecured fixed notes of up to $500 million due January 2018.

"The rating on the proposed notes follows the pari passu ranking of Davivienda's existing and future senior unsecured and unsubordinated debt obligations and, as such, mirrors the bank's long-term issuer credit rating," said Standard & Poor's credit analyst Alfredo Calvo. This issuance will provide foreign currency resources which will support the bank's expansion in Central America. In our view, the dollar-denominated notes will not increase Davivienda's foreign exchange risk. The issuance amount represents around 3% of Davivienda's total funding base and therefore does not represent higher refinancing risk. In addition, as a five-year issuance, we believe the funds will allow Davivienda to improve the maturity match of assets and liabilities.

"Despite our favorable view of a more diversified funding structure, we'll be monitoring Davivienda's funding and liquidity management to determine if the bank's stand-alone credit profile would be affected by a more aggressive strategy," added Mr. Calvo.

The ratings on Davivienda reflect the bank's "adequate" business position, "moderate" capital and earnings, "adequate" risk position, "average" funding and "adequate liquidity" (as our criteria defines these terms).

For a complete credit rating rationale on Davivienda, please see "Banco Davivienda 'BBB-/A-3' Ratings Affirmed And Off CreditWatch Negative, Outlook Stable," published May 15, 2012.

RELATED CRITERIA AND RESEARCH

-- Banco Davivienda 'BBB-/A-3' Ratings Affirmed And Off CreditWatch Negative, Outlook Stable," May 15, 2012.

-- Banks: Rating Methodology And Assumptions, Nov. 9, 2011

-- Banking Industry Country Risk Assessment Methodology and Assumptions, Nov. 9, 2011

-- Bank Hybrid Capital Methodology And Assumptions, Nov. 1, 2011

RATINGS LIST

Banco Davivienda S.A.

Issuer credit rating BBB-/Stable/A-3

Rating Assigned

Banco Davivienda S.A.

$500M senior unsecured notes due 2018 BBB-

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