Fitch: Discover notes BBB

Fitch Ratings said it expects to assign a BBB rating to Discover Bank's senior unsecured notes.

The notes are expected to mature in 2018. The proceeds are expected to be used for general corporate purposes.

Discover is expected to be an opportunistic issuer of bank notes over time, which will serve to enhance the company's funding flexibility, Fitch said.

Discover Bank has a long-term issuer default rating of BBB, short-term issuer default rating of F2, viability rating of BBB, short-term deposits rating of F2, long-term deposits rating of BBB+, subordinated debt rating of BBB-.

Discover Financial Services Inc. has a long-term issuer default rating of BBB, short-term issuer default rating of F2, viability rating of BBB, senior debt rating of BBB and preferred stock rating of B+.

The outlook is stable.

The ratings and outlook reflect the expectation for earnings consistency, moderate portfolio growth, peer-superior asset quality and the maintenance of strong liquidity and risk-adjusted capitalization, Fitch said.

Increased revenue diversity, proven competitive positioning and credit performance in non-card loan categories over time could support positive rating momentum, the agency said.

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