DBRS Morningstar Assigns Ratings to Abanca’s Subordinated Debt at BBB (low) with Stable Trend

DBRS Ratings GmbH (DBRS Morningstar) assigned ratings to Abanca Corporación Bancaria S.A. (Abanca or the Bank) Subordinated Debt at BBB (low) with a Stable trend. These instruments are included in the Bank’s EUR 5 billion Euro Medium Term Note Programme dated June 12, 2023 (the Programme). A full list of rating actions is included at the end of this press release.

KEY CREDIT RATING CONSIDERATIONS

In line with the Bank Obligations Framework set out in DBRS Morningstar’s Global Methodology for Rating Banks and Banking Organisations (June 2023), Subordinated Debt issued under the Programme will be rated two notches below the Bank’s Long-Term Issuer Rating and Intrinsic Assessment (IA) of BBB (high).

CREDIT RATING DRIVERS
Any positive change in the Bank’s Intrinsic Assessment would have positive implications for the Subordinated Debt rating.

Similarly, any negative change in the Bank’s Intrinsic Assessment would have negative implications for the rating.

ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS

Governance (G) Factors

DBRS Morningstar views the Corporate / Transaction Governance subfactor under the Governance ESG factor as relevant since it considers the Bank’s board independence to be more limited than peers with a wider ownership, albeit Abanca’s Board of Directors (BoD) currently consists of 12 members, of which 9 are independent. On top of this, Abanca maintains a Corporate Governance Excellence Plan, aligned with best market practices, and certified by evaluations carried out by independent third parties. As a result, these risks are incorporated in the Bank’s Franchise and Capital grid grades.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings (4 July 2023) - https://www.dbrsmorningstar.com/research/416784/dbrs-morningstar-criteria-approach-to-environmental-social-and-governance-risk-factors-in-credit-ratings

Notes:

All figures are in EUR unless otherwise noted.

The principal methodology is the Global Methodology for Rating Banks and Banking Organisations (22 June 2023) - https://www.dbrsmorningstar.com/research/415978/global-methodology-for-rating-banks-and-banking-organisations. In addition DBRS Morningstar uses the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings https://www.dbrsmorningstar.com/research/416784/dbrs-morningstar-criteria-approach-to-environmental-social-and-governance-risk-factors-in-credit-ratings in its consideration of ESG factors.

The credit rating methodologies used in the analysis of this transaction can be found at: https://www.dbrsmorningstar.com/about/methodologies

The sources of information used for this credit rating include Morningstar Inc. and Company Documents, Abanca EMTN Programme from June 12, 2023. DBRS Morningstar considers the information available to it for the purposes of providing this credit rating to be of satisfactory quality.

This credit rating concerns a newly issued financial instrument. This is the first DBRS Morningstar credit rating on this financial instrument.

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

The conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. DBRS Morningstar's outlooks and credit ratings are under regular surveillance.

For further information on DBRS Morningstar historical default rates published by the European Securities and Markets Authority (ESMA) in a central repository, see: https://registers.esma.europa.eu/cerep-publication. For further information on DBRS Morningstar historical default rates published by the Financial Conduct Authority (FCA) in a central repository, see https://data.fca.org.uk/#/ceres/craStats.

The sensitivity analysis of the relevant key credit rating assumptions can be found at: https://www.dbrsmorningstar.com/research/423591.

This credit rating is endorsed by DBRS Ratings Limited for use in the United Kingdom.

Lead Analyst: Arnaud Journois, Vice President, Global FIG
Rating Committee Chair: Elisabeth Rudman, Managing Director, Head of Global FIG
Initial Rating Date: November 23, 2009
Last Rating Date: March 28, 2023

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For more information on this credit or on this industry, visit www.dbrsmorningstar.com.