Fitch rates Allied Irish Banks debt BB-

Fitch Ratings said it assigned a final long-term rating of BB- to Allied Irish Banks, plc’s tier 2 subordinated debt.

The final rating is in line with the expected rating recently assigned to the notes, Fitch said.

The issue is rated one notch below the bank’s BB viability rating, reflecting a higher-than-average loss severity of this type of debt than senior unsecured obligations, the agency said.

Fitch said it has not applied additional notching for incremental non-performance risk relative to the viability rating given that loss absorption would only occur once the bank reaches the point of non-viability.

The positive outlook reflects a view that as improvements in the bank’s capital profile and de-leveraging of problematic assets continue to feed through to its credit profile, the ratings may be upgraded, the agency said.

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