S&P assigns Sumitomo Mitsui notes BB+

S&P said it assigned a BB+ long-term issue credit rating to the proposed perpetual, subordinated additional tier 1 (AT1) notes to be issued by Sumitomo Mitsui Financial Group Inc. The notes are expected to qualify as Basel III-compliant AT1 notes under Japanese regulations.

The rating is based on SMFG’s group stand-alone credit profile of a. The agency said it then subtracts a notch for subordination, two for the risk of coupons not being paid as tier 1 capital, another for the risk of principal write-down if the bank is facing distress or nonviability, and another notch because SMFG is a nonoperating holding company, which means that the creditors of the issuer are structurally subordinated to the creditors of the operating companies.

The outlook is stable.

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