DBRS Confirms Government Guaranteed Debt issued by Novo Banco at BBB (low), Stable Trend

DBRS Ratings Limited (DBRS) has today confirmed the ratings of the following government guaranteed Senior Notes (the Notes) issued by Novo Banco, S.A. (Novo Banco or the Bank) at BBB (low), Stable Trend:

Unsubordinated Notes Guaranteed by the Republic of Portugal - PTBENFOM0027
Unsubordinated Notes Guaranteed by the Republic of Portugal - PTBENHOM0017
Unsubordinated Notes Guaranteed by the Republic of Portugal - PTBEQHOM0014

The BBB (low) rating on the Notes is based on the explicit guarantee provided by the Republic of Portugal [BBB (low), Stable Trend]. This rating of the Notes reflects the Portuguese government’s ability to honour this guarantee as determined by DBRS’s rating of the sovereign.

Today’s rating action follows the extension of the maturity of the notes, which was approved by the Republic of Portugal on December 16, 2014. The notes have been extended by one year from original maturity date to December 2015, January 2016 and February 2016. The notes were issued and held by former Banco Espírito Santo S.A. (BES) based on the guarantee from the Republic of Portugal dated December 22, 2011. These notes were transferred to Novo Banco upon resolution of BES on August 4, 2014. Accordingly, DBRS transferred the ratings on the notes to Novo Banco on August 5, 2015.

For more information visit www.dbrs.com

Today’s rating action does not impact Novo Banco’s Senior Long-Term Debt & Deposit rating of BB (low) and Short-Term Deposit rating of R-4. These ratings remain Under Review with Developing Implications.

Notes:
All figures are in EUR unless otherwise noted.

The principal applicable methodology is the Global Methodology for Rating Banks and Banking Organisations (June 2014). Other applicable methodologies include the DBRS Criteria: Support Assessments for Banks and Banking Organisations (March 2015) and DBRS Criteria: Rating Bank Capital Securities – Subordinated, Hybrid, Preferred & Contingent Capital Securities (February 2015).These can be found can be found at: http://www.dbrs.com/about/methodologies

The sources of information used for this rating include company reports, the European Central Bank, European Banking Authority, Bank of Portugal and SNL Financial. DBRS considers the information available to it for the purposes of providing this rating was of satisfactory quality.

DBRS does not audit the information it receives in connection with the rating process, and it does not and cannot independently verify that information in every instance.

Generally, the conditions that lead to the assignment of a Negative or Positive Trend are resolved within a twelve month period. DBRS’s outlooks and ratings are under regular surveillance.

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/statistics/defaults.xhtml.

Ratings assigned by DBRS Ratings Limited are subject to EU regulations only.

Lead Analyst: María Rivas
Rating Committee Chair: Roger Lister
Initial Rating Date: August 5, 2014
Most Recent Rating Update: August 5, 2014

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For additional information on this rating, please refer to the linking document located at: http://www.dbrs.com/research/236983/banks-and-banking-organisations-linking-document.pdf

Information regarding DBRS ratings, including definitions, policies and methodologies are available on www.dbrs.com.