Fitch rates Royal Bank of Scotland notes BB-

Fitch Ratings said it published an expected rating of BB- on the Royal Bank of Scotland Group’s upcoming issue of dollar-denominated perpetual subordinated contingent convertible capital notes at BB-.

The rating on the securities is five notches below the bank’s BBB+ viability rating, in line with the criteria for assigning ratings to hybrid instruments, Fitch said.

The securities are notched twice for loss severity to reflect the conversion into common shares on a breach of the 7% fully loaded CET1 ratio trigger and three times for incremental non-performance risk relative to the viability rating, the agency said.

Fitch said it assigned 100% equity credit to the securities, which reflects their full coupon flexibility, ability to be converted into common equity well before the bank would become non-viable, permanent nature and subordination to all senior creditors.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.