Moody’s rates Skandiabanken program A3

Moody's Investors Service said it assigned provisional A3 long-term and provisional Prime-2 short-term ratings to Skandiabanken ASA's proposed €2 billion senior unsecured euro medium-term note program.

The agency also affirmed the bank's baseline credit assessment (BCA) of baa1, the adjusted BCA of baa1 and the long- and short-term deposit ratings of A3 and Prime-2.

Skandiabanken’s long-term counterparty risk assessment of A1(cr) and short-term counterparty risk assessment of P-1(cr) were also affirmed.

Moody’s said the ratings reflect the bank's BCA and one notch uplift under the agency’s advanced loss-given-failure approach reflecting the loss absorption provided by the cushion of subordinated, unsecured debt and junior deposits.

The baa1 BCA is supported by: (a) The bank's very low asset risk, being largely focused on retail mortgages in a supportive operating environment; (b) its very high capitalization; (c) a relatively strong recurring profitability; and (d) a funding profile of largely deposit funded balance sheet but with an increasing portion of market funding.

The outlook on the long-term deposit rating is stable.

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