Fitch affirms CYBG, Virgin Money

Fitch Ratings said it affirmed CYBG plc's and Virgin Money Holdings (UK) plc's long-term issuer default ratings at BBB+ with stable outlooks.

The agency said the affirmations follow the announcement that the boards of CYBG and Virgin Money will recommend the terms of an all-share takeover of Virgin Money by CYBG.

Following the issue of new shares, CYBG current shareholders will own 62% of the combined bank and Virgin Money shareholders will own 38%.

Fitch said the affirmation is based on a view that the combined entity's risk profile immediately after the planned acquisition will be in line with the current ratings of each entity.

“A combined CYBG and VMH would benefit from increased business model diversification, strengthened profitability supported by possible cost synergies and a more extensive national network,” the agency said in a news release.

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