Moody’s rates Volvofinans debt Baa3

Moody's Investors Service said it assigned a provisional Baa3 local currency rating to the expected SEK 400 million subordinated debt issue of Volvofinans Bank AB (long-term bank deposits A3 stable, short-term bank deposits Prime-2, BCA baa2) dated subordinated debt.

Moody’s said the rating reflects: (a) Volvofinans's robust standalone financial fundamentals, with strong asset quality and capitalization, stable profitability, a relatively high degree of deposit funding compared to peers, and a comparatively low correlation with its industrial parent for an auto bank, resulting in a baseline credit assessment (BCA) of baa2; and (b) the security's loss absorbing features in the case of failure, being subordinated to senior obligations, indicating a negative one notch from the BCA according to Moody's Advanced LGF.

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