DBRS Downgrades Ratings of BBVA to AA (low), Neg. Trend, Following Sovereign Downgrade

DBRS, Inc. (DBRS) has today downgraded the ratings of Banco Bilbao Vizcaya Argentaria, S.A. (BBVA or the Group), including its Issuer & Senior Debt rating to AA (low) from AA. The trend remains Negative. DBRS has also lowered BBVA’s Short-Term Instruments rating to R-1 (mid) from R-1 (high); the trend has been revised to Stable from Negative. These rating actions follow DBRS’s downgrade of the Kingdom of Spain to AA (low) from AA, with a Negative trend.

BBVA’s intrinsic assessment (IA) of AA (low) remains unchanged. Additionally, DBRS maintains its SA-2 support assessment for BBVA, which indicates an expectation of timely systemic support in case of need. However, with the current rating for the Spanish sovereign at AA (low), which is equal to the IA for BBVA, there is currently no uplift to the Group’s ratings.

The continued Negative trend reflects DBRS’s perspective that further negative action on the sovereign rating is likely to negatively affect BBVA’s AA (low) rating. While the Group has a sizeable franchise outside its home country and generates broad-based earnings externally that have helped BBVA cope with disrupted markets and stressed domestic conditions, such additional sovereign action would likely reflect a deteriorating environment not only in Spain, but also in the Eurozone and elsewhere that combined would pressure the Group’s intrinsic strength.

Notes:
All figures in Euros (EUR) unless otherwise noted.

For further information related to DBRS’s rating action on the Kingdom of Spain, please see the related press release under Related Research.

The principal applicable methodology is the Global Methodology for Rating Banks and Banking Organisations. Other methodologies used include the Enhanced Methodology for Bank Ratings – Intrinsic and Support Assessments. Both can be found on the DBRS website under Methodologies.

The sources of information used for this rating include the issuer, SNL Financial and the DBRS rating of the Kingdom of Spain. DBRS considers the information available to it for the purposes of providing this rating was of satisfactory quality.

This credit rating has been issued outside the European Union (EU) and may be used for regulatory purposes by financial institutions in the EU.

Lead Analyst: Roger Lister
Rating Committee Chair: Alan G. Reid
Initial Rating Date: 23 November 2009
Most Recent Rating Update: 19 August 2011

For additional information on this rating, please refer to the linking document under Related Research.