S&P affirms Banco Mercantil on tender offer

Standard & Poor’s said it affirmed the B- and C global scale issuer credit ratings on Banco Mercantil do Brasil SA.

The agency also said it affirmed the bank’s brB+ national scale rating.

The outlook remains stable.

The ratings were affirmed following news of the bank’s cash tender for up to $30 million of its outstanding $180 million subordinated notes due in 2020.

In accordance with criteria for distressed exchanges and offers, S&P said it views the proposed cash tender offer as opportunistic.

Although the bank is offering less value than the original promise ($800 for each $1,000 of principal amount), the agency said it doesn’t expect a conventional default of the bank in the short- to intermediate-term if the investors don’t accept the proposed offer.

The bank’s broad liquid assets to short-term wholesale funding is about 2.3x, which is viewed as comfortable while it reflects the bank’s retail-oriented client base and funding profile, S&P said.

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