Fitch rates KBC Group debt BBB+

Fitch Ratings said it assigned KBC Group NV's (A-/stable/F1) planned issue of benchmark subordinated Tier 2 debt securities an expected rating of BBB+(EXP).

The notes are dated (10 years, callable after five years), subordinated to senior creditors and the payment of the coupon is mandatory. They have no contractual loss absorbing features, but would statutorily be subjected to loss absorption if KBC Group becomes nonviable.

Fitch said the rating assigned to the securities is notched off KBC Group's implicit intrinsic creditworthiness, of which KBC Bank NV (A-/stable/a-) is the predominant operating entity. The notes are rated one notch below this implicit intrinsic creditworthiness in accordance with Fitch's criteria for "Assessing and Rating Bank Subordinated and Hybrid Securities." The notching reflects the notes' below average loss severity relative to senior unsecured creditors, the agency said.

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