DBRS Upgrades pbb hybrid Tier 1 HRE International Trust I to BB, Stable Trend

On July 20, 2015, DBRS Ratings Limited (DBRS) upgraded its rating on pbb’s hybrid Hypo Real Estate International Trust I to BB from D. The Trend on the rating is Stable. The rating had been placed at “D” in 2009 due to the regulatory actions which effectively prevented payments on the hybrid until silent participations provided to the Bank by German Financial Markets Stabilisation Fund (Soffin) had been repaid.

In conjunction with the recent IPO of the Bank in July 2015 and the repayment of the silent participations on 6 July 2015, the regulatory restrictions no longer apply. Going forward, pbb expects to meet the profitability and balance sheet distributable reserve conditions needed to resume payments on the hybrid instruments and its planned payment of dividends will also obligate the Bank to resume payment on the hybrid instruments.

The BB rating on the securities is three notches below pbb’s IA of BBB. This reflects DBRS’approach of notching perpetual, non-cumulative Tier 1 instruments two notches below the IA, with an additional notch added to reflect the fact that payments are not currently being made on the instrument. DBRS expects to rate the instrument two notches below the IA once payments have resumed.

Notes:
All figures are in EUR unless otherwise noted.

The principal applicable methodology is the Global Methodology for Rating Banks and Banking Organisations (June 2015). 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 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: Peter Burbank
Rating Committee Chair: Roger Lister
Initial Rating Date: June 12, 2007
Most Recent Rating Update: May 6, 2014

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