Moody's rates Philippine National Bank notes Baa2

Moody's Investors Service said it assigned a Baa2 rating to Philippine National Bank's proposed dollar-denominated senior unsecured notes issued under the bank's $1 billion euro medium-term note program.

The bonds will have a maturity of five years and will be listed on the Singapore Exchange.

The outlook is stable.

The rating is underpinned by the bank's Baa3 baseline credit assessment and a one-notch uplift to reflect an assumption that the bank will receive support from the government of the Philippines in times of need, Moody's said.

The ratings also reflect the bank's stable asset quality profile and high levels of capitalization and loan-loss coverage.

These factors provide sufficient loss-absorption capacity at its current rating level to withstand an expected moderate asset quality deterioration over the next 12 to 18 months.

These strengths are balanced by the bank's low profitability metrics when compared with other banking peers in the country, given its low cost efficiency, the agency said.

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