S&P affirms Banco Hipotecario

Standard & Poor’s said it affirmed its CCC+ local currency issuer credit on Banco Hipotecario SA and affirmed the CCC- foreign currency issuer credit rating and issue-level ratings on the bank.

The outlook remains negative.

S&P said the rating affirmation follows Banco Hipotecario’s announcement of a cash tender for its outstanding $211 million senior unsecured notes due April 2016.

“In accordance with our criteria for distressed exchange and offers, we view the proposed cash tender offer as opportunistic. Furthermore, the bank is offering higher value than the original promise ($1,025 for each $1,000 of principal amount) and current market value. We don't expect a conventional default, in case investors don´t accept the proposed offer,” S&P said in a news release.

In conjunction with the commencement of the tender offer, the bank will issue new senior notes. The tender offer is conditioned upon the consummation of the offering of the new debt, the agency said.

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