DBRS Confirms ICO’s Senior Ratings at A (low), Stable Trend

DBRS Ratings Limited (DBRS) has confirmed the ratings of Instituto de Crédito Oficial (ICO or the Bank). The Long-Term Issuer Rating has been confirmed at A (low) with Stable trend. At the same time, the agency has confirmed the Short-Term Issuer Rating at R-1 (low) with Stable trend. ICO’s ratings are driven by its statutory ownership and the full guarantee of its liabilities by the Kingdom of Spain. This rating action follows DBRS’s confirmation of the Kingdom of Spain at A (low) with Stable trend on October 6, 2017.

ICO is a credit institution by law and is considered to be a State Finance Agency of Spain. ICO benefits from an explicit, irrevocable, unconditional and direct guarantee from the Kingdom of Spain that is stated in its by-laws under the Royal Decree Act 706/1999. Hence, ICO’s ratings are backed by the explicit, unconditional, irrevocable and direct guarantee from the Kingdom of Spain (or the State). Therefore, the ratings and trend are equalised with the Long-Term and Short-Term Foreign and Local Currency ratings of the Kingdom of Spain.

Given the specific role of the Bank and the guarantee provided by the Kingdom of Spain on the Bank’s liabilities, DBRS has decided to no longer maintain the individual Intrinsic Assessment (IA) on the Bank.

RATING DRIVERS:

The Long-Term and the Short-Term ratings move in line with the ratings of the Kingdom of Spain. Positive rating pressure could result from an upgrade of the Kingdom of Spain.

The Long-Term and the Short-Term ratings could come under pressure if the macroeconomic environment significantly deteriorates and the Kingdom of Spain rating were to be downgraded.

Notes:
All figures are in Euros unless otherwise noted.

The principal applicable methodology is the DBRS Criteria: Guarantees and Other Forms of Support (February 2017). Other applicable methodologies include the Global Methodology for Rating Banks and Banking Organisations (May 2017). 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, company disclosures, the Bank of Spain and the European Central Bank. DBRS considers the information available to it for the purposes of providing this rating to be 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 historical default rates published by the European Securities and Markets Authority (“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 and US regulations only.

Lead Analyst: Maria Rivas – Vice President - Global FIG
Rating Committee Chair: Elisabeth Rudman, Managing Director, Head of EU FIG, Global FIG
Initial Rating Date: September 16, 2011
Most Recent Rating Update: July 14, 2017

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