DBRS Confirms Santander Totta at BBB (high), Negative Trend, After Confirmation of Santander at “A”

DBRS Ratings Limited (DBRS) has today confirmed the ratings of Banco Santander Totta S.A. (Totta or the Bank) following the confirmation of its parent, Banco Santander S.A. (Santander or the Parent). DBRS has confirmed Totta’s Senior Unsecured Long-Term Debt & Deposit rating of BBB (high) and Short-Term Debt & Deposit rating at R-1 (low). The trend on all ratings is Negative.

These rating actions follow DBRS’s confirmation of Santander at “A” with a Negative trend. DBRS maintains its SA1 support assessment for Totta. The SA1 designation implies strong and predictable support from the Parent. As a supported rating with an SA1 designation, Totta’s rating will generally move in tandem with Santander’s long-term debt ratings.

The ratings of Totta reflect its important role as a core component of Santander’s international franchise and DBRS’s expectation that Santander has the resources and motivation to support Totta, if needed. The two notch differential between Totta’s long-term debt rating of BBB (high) and Santander’s long-term debt rating of “A” reflects the risks associated with rating a bank subsidiary in foreign country, particularly a lower-rated country. DBRS rates the Republic of Portugal at BBB (low) with a Negative trend. DBRS views the increased risks associated with the lower rating of the Republic of Portugal as appropriately reflected in the two notch ratings differential between the Parent and Totta. Without parental support, Totta’s ratings would be significantly lower.

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

The principal applicable methodology is the Global Methodology for Rating Banks and Banking Organisations. Other methodologies used include the DBRS Criteria – Intrinsic and Support Assessments and DBRS Criteria: Rating Bank Capital Securities - Subordinated, Hybrids & Preferred Securities. These can be found on the DBRS website under Methodologies

The sources of information used for this rating include 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.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.

Lead Analyst: Rui Croca
Rating Committee Chair: Alan G. Reid
Initial Rating Date: 18 July 2012
Most Recent Rating Update: 23 August 2012

For further information on DBRS’ historic default rates published by the European Securities and Markets Administration (“ESMA”) in a central repository see http://cerep.esma.europa.eu/cerep-web/

The conditions that lead to the assignment of a Negative or Positive Trend are generally resolved within a twelve month period. DBRS’s trends and ratings are constantly under surveillance.

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