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Moody’s: Santander Consumer Bank program A3, Baa3
Moody's Investors Service said it assigned a provisional A3 foreign currency rating to the senior unsecured medium-term note program of Santander Consumer Bank AS (SCB) and a provisional Baa3 foreign currency rating to the subordinated medium-term note program.
Moody’s said the provisional A3 long-term senior unsecured program rating, which – as opposed to certain other securities issued by the bank – is not guaranteed by its Spanish parent Santander Consumer Finance SA (Santander CF; debt and deposits A3/A3 stable, BCA baa2), reflects: (a) The bank's BCA of baa3; (b) one notch of uplift resulting from the high probability of affiliate support from Santander CF and ultimately from Banco Santander SA (Spain) (A3/A3 stable, BCA baa1); and (c) two notches of uplift arising from Moody's Advanced Loss Given Failure (LGF) analysis, which assesses the benefit of instrument volume and subordination protecting creditors from losses in the event of resolution.
The agency assumes a low probability of support from the Norwegian government in favor of depositors and senior unsecured debt holders, which does not translate into rating uplift.
The provisional Baa3 subordinated program rating, which is equally not backed by Santander CF is derived from: (a) The bank's adjusted BCA of baa2; and (b) Moody's Advanced LGF analysis, which results into a negative adjustment of one notch from the adjusted BCA, driven by the current low volume of subordinated debt issued by the bank (roughly 1.2% of tangible banking assets in resolution) as well as the low level of subordination provided by additional tier one (AT1) instruments issued by the bank (about 1.7%).
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