Moody’s ups Santander Mexico, BBVA

Moody’s Investors Service said it raised its ratings for Banco Santander Mexico SA’s and BBVA Mexico SA’s foreign-currency subordinate bonds to Baa2 (hyb) from Baa3 (hyb) and its foreign-currency senior unsecured bonds to A3 STA from Baa1 STA.

For both banks, the Baa2 (hyb) subordinate debt rating for tier 2 securities, the agency’s loss-given failure analysis indicates a high loss because of the limited protection from residual equity, leading to position its provisional rating assessment at baa2, one notch below BBVA's baa1 adjusted baseline credit assessment, the agency said.

For the A3 long-term deposit and senior unsecured debt ratings, Moody's advanced LGF analysis indicates that Santander’s and BBVA's junior deposits and senior debt are likely to face low loss given failure, because of the loss absorption provided by the bank's subordinated debt and the volume of deposits and senior unsecured debt. This results in a one-notch uplift from the bank's baa1 adjusted BCA for the long-term deposit ratings and senior unsecured debt of BBVA, Moody’s said.

The outlook is stable.

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