Moody’s rates ICBC securities Ba2 (hyb)

Moody's Investors Service said it assigned a Ba2 (hyb) rating to Industrial and Commercial Bank of China Ltd.’s (ICBC) proposed multi-currency denominated Additional Tier 1 capital qualifying offshore preference shares.

The outlook is stable.

The proposed securities are subject to full or partial compulsory H-share conversion upon the occurrence of a trigger event. The rating is three notches below ICBC's baa2 adjusted baseline credit assessment, which in turn starts with the bank's baseline credit assessment and adds parental support, if any.

ICBC's adjusted baseline credit assessment is the same as its baseline credit assessment.

"The Ba2 (hyb) rating is three notches below ICBC's baa2 adjusted BCA, reflecting the structure of the proposed issuance, and our assumption that investors in these securities face the risk of full or partial compulsory H-share conversion upon the occurrence of a trigger event," Moody's vice president and senior credit officer Christine Kuo said in a news release.

"The rating also incorporates the probability of impairment associated with cancellation of dividend. Such an impairment could occur before the bank reaches the point of non-viability."

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