Fitch rates Shanghai Commercial bonds A+(twn)

Fitch Ratings said it assigned the Shanghai Commercial & Savings Bank, Ltd.'s NT$ 5 billion subordinated unsecured bonds an A+(twn) national long-term rating.

The bank will sell the notes in two tranches. The first tranche of NT$2.05 billion due Oct. 25, 2028, will carry a fixed-coupon rate of 0.6% annually. The second tranche of NT$2.95 billion due Oct. 25, 2031, will carry a fixed coupon rate of 0.72% annually.

The bond is a Basel III-compliant tier 2 (B3T2) instrument and is rated two notches below the bank's national long-term rating of AA(twn). This comprises zero notching for non-performance risk and two notches for loss severity, reflecting the poor recovery prospects for B3T2 debt and in line with the standard notching for B3T2 instruments under Fitch's Exposure Draft: Bank Rating Criteria,” the agency said in a press release.

The proceeds will be used to support the bank's business development and to enhance its capitalization.

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