Fitch rates Oversea-Chinese Banking notes BBB

Fitch Ratings said it assigned an expected rating of BBB to Oversea-Chinese Banking Corp.’s proposed Singapore dollar-denominated non-cumulative non-convertible perpetual capital securities.

The securities are intended to qualify as additional tier 1 capital securities of the bank under the Basel III regime, Fitch said.

The securities are rated five notches below the bank’s AA- viability rating, comprising two notches for loss severity and three notches for non-performance risk, the agency said.

The loss severity is high in view of the notes’ deep subordination status, Fitch said.

The securities, together with all other additional tier 1 capital securities, will rank ahead of claims only from the bank’s ordinary shareholders and below all senior liabilities and tier 2 capital securities of the bank, the agency said.

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