DBRS Rates Santander’s Inaugural Senior Non-Preferred Notes at A (low) with Stable Trend

DBRS, Inc. (DBRS) has assigned a rating of A (low) with Stable trend to Banco Santander SA’s (Santander) Senior Non-Preferred Notes (called Second Ranking Senior Notes by Santander). Santander issued EUR 1.5 billion notes in January utilizing contractual subordination to designate the ranking of this debt. DBRS expects that any future issuance by Santander of Senior Non-Preferred Notes, with the same contractual subordination and Intrinsic Assessment level, would be rated at this level. The rating on Santander’s Senior Non-Preferred Notes is one notch below its Intrinsic Assessment of “A”.

DBRS discusses its views on insolvency frameworks in response to regulatory requirements for bank resolution in its comment “DBRS: Developments in European Bank Resolution Frameworks and their Impact on Bank Creditors”, dated July 2016.

DBRS also discusses its approach for rating Senior Non-Preferred Notes issued by banks in France in the comment “DBRS: Rating the New French Senior Non-preferred Debt Instruments”, dated November 2016.

RATING DRIVERS
Any change in Santander’s Intrinsic Assessment would lead to a change in the rating of the Senior Non-Preferred Notes. If there is a material change in regulation of bank capital instruments, this could impact the rating of the notes.

Notes:
All figures are in EUR unless otherwise noted.

The applicable methodologies are the Global Methodology for Rating Banks and Banking Organisations (June 2016), DBRS Criteria: Support Assessments for Banks and Banking Organisations (March 2016), DBRS Criteria: Rating Bank Capital Securities – Subordinated, Hybrid, Preferred & Contingent Capital Securities (February 2016), DBRS Criteria: Guarantees and Other Forms of Support (February 2016) and Critical Obligations Rating Criteria (February 2017), which can be found on our website under Methodologies.

The primary sources of information used for this rating include company documents and SNL Financial. DBRS considers the information available to it for the purposes of providing this rating was of satisfactory quality.

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

Lead Analyst: Lisa Kwasnowski, Senior Vice President, Global Financial Institutions Group
Rating Committee Chair: William Schwartz, Senior Vice President, Global Credit Policy
Initial Rating Date: October 11, 2006
Last Rating Date: January 13, 2017

This rating was not initiated at the request of the rated entity.

The rated entity or its related entities did participate in the rating process. DBRS did not have access to the accounts and other relevant internal documents of the rated entity or its related entities.