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TEXT-Fitch may still cut Banque Internationale a Luxembourg ratings
April 5, 2012 / 3:47 PM / 5 years ago

TEXT-Fitch may still cut Banque Internationale a Luxembourg ratings

(The following statement was released by the rating agency)	
    April 5 - Fitch Ratings has maintained Banque Internationale a Luxembourg's
(BIL) 'A+' Long-term Issuer Default Rating (IDR) on Rating Watch Negative (RWN).
A full list of ratings is at the end of this 	
comment. 	
	
The rating actions follow Dexia's announcement that it has signed a share 	
purchase agreement to sell 90% of its stake in BIL to Precision Capital, a 	
Qatari investment group, and the remaining 10% to the Grand Duchy of Luxembourg 	
('AAA'/Stable) for a consideration of EUR730m. BIL's Long-term IDR was placed on	
RWN on 7 October 2011 following the announcement that Dexia ('A+'/Negative) had 	
entered into exclusive negotiations to sell BIL. On 22 March, 2012, the bank 	
changed its name to BIL (previously called Dexia Banque Internationale a 	
Luxembourg). 	
	
BIL's Long- and Short-term IDRs, Support Rating and Support Rating Floor 	
continue to be driven by an extremely high probability of support to Dexia, and 	
in turn BIL, from the states of France ('AAA'/Negative), Belgium ('AA'/Negative)	
and Luxembourg if required. Until the transaction has been completed, Fitch 	
expects Dexia to provide support to BIL if necessary. However, once the sale of 	
BIL is closed, this should no longer be the case. 	
	
BIL's future ratings will take into account the bank's domestic systemic 	
importance, as one of the three largest retail banks in Luxembourg, and the 	
state's direct 10% stake in the bank. This would be expected to lead to a 	
Support Rating Floor of 'A-' and a Support Rating of '1'. Therefore, the Support	
Rating has been affirmed. 	
	
The RWN will be resolved once the sale of BIL is closed, expected in Q312. 	
	
The rating actions are as follows: 	
	
Banque Internationale a Luxembourg (BIL):	
Long-term IDR: 'A+' maintained on RWN 	
Short-term IDR: 'F1+' maintained on RWN	
Support Rating: affirmed at '1'; removed from RWN	
Support Rating Floor: 'A+' maintained on RWN	
Senior debt: 'A+' maintained on RWN	
Market linked notes: 'A+emr' maintained on RWN	
Subordinated debt: 'BBB-' maintained on RWN	
Hybrid securities: 'CCC' maintained on RWN	
	
 (Caryn Trokie, New York Ratings Unit)

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