Moody's rates DBS Bank junior debt Aa3

Moody's Investors Service said it has assigned an Aa3 rating to DBS Bank Ltd.'s proposed fixed-rate Singapore dollar junior subordinated debt issue due 2021.

Moody's said the rating reflects both DBS Bank's above-average financial strength and the structure of this subordinated issue.

As with many upper tier II capital-qualifying subordinated debt issues, DBS Bank's subordinated securities include provisions that allow the borrower to defer payment of interest, under certain circumstances. If implemented, such provisions, while not legally constituting an event of default, could result in payment terms appreciably different from senior securities.

This distinction has been reflected in the rating differential between the institution's senior obligations and this subordinated debt issue, Moody's added.

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