S&P gives Belfius Bank perpetuals BB

S&P said it assigned a BB long-term issue rating to the proposed perpetual additional tier 1 capital instrument to be issued by Belfius Bank SA/NV.

The agency said it understands that the preferred securities will rank senior to ordinary shares, but will be subordinated to more senior debt, including Belfius Bank's tier 2 debt.

The rating is four notches below the bbb+ assessment of Belfius Bank's stand-alone credit profile.

S&P said the four-notch difference reflects one notch for subordination risk, two additional notches to consider the risk of nonpayment at the full discretion of the issuer and the hybrid's expected inclusion in tier 1 regulatory capital, and one further notch reflecting the proposed issue's mandatory contingent capital clause leading to temporary write down of the securities.

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