S&P rates Maybank notes BBB

Standard & Poor’s said it assigned a BBB long-term rating to the tranche of Basel-III compliant tier-2 notes under the expanded multi-currency medium-term note program of Malayan Banking Bhd. (Maybank).

The bank is increasing its existing 5 billion medium-term program to $15 billion.

The agency also said it affirmed the A- long-term issue rating on the senior unsecured notes and long-term BBB+ rating on the existing tier-2 notes that the bank issued under the same program.

To comply with Basel III regulations, future tier-2 notes will incorporate a non-viability loss-absorbing feature.

S&P said it rates these tier-2 notes two notches less than Maybank’s stand-alone credit profile of A-.

The ratings reflect the risk of subordination of the notes and a contingency clause under which Maybank must write off the principal or interest on the notes if a non-viability trigger is activated, the agency said.

The senior unsecured notes will constitute direct, unconditional, unsecured and unsubordinated obligations of the bank, S&P said, and shall at all times rank equally with all other unsecured obligations.

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