Moody’s rates Nationwide Building notes Baa1

Moody's Investors Service said it assigned provisional Baa1 ratings to the new senior non-preferred medium-term note program of Nationwide Building Society, creating a new category of senior debt.

The senior non-preferred, "junior senior" unsecured notes, will be issued as part of Nationwide's existing $25 billion European medium-term note program and $20 billion U.S. medium-term note program.

The notes will be explicitly designated as senior non-preferred in the documentation. As such they will rank junior to other senior obligations, including senior unsecured debt, and senior to subordinated debt.

Moody’s said the provisional Baa1 rating assigned to the junior senior program reflects: (a) Nationwide's adjusted baseline credit assessment (BCA) of a3; (b) Moody's advanced Loss Given Failure (LGF) analysis, which indicates likely high loss severity for these instruments in the event of the failure, leading to a position one notch below the bank's adjusted BCA; and (c) Moody's assumption of a low probability of government support for this new instrument, resulting in no uplift.

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