S&P rates Westpac notes BBB+

Standard & Poor's said it assigned its BBB+ long-term issue credit rating to the subordinated notes component of Westpac Banking Corp.'s (AA-/stable/A-1+) $70 billion program for the issuance of debt instruments.

At the same time, the agency withdrew its A- rating on Westpac's "old style" subordinated notes component of that program.

The long-term AA- rating on Westpac's senior unsecured notes and the A-1+ rating on those notes' short-term obligations remain unchanged.

S&P said the action reflects an update of program documentation by Westpac that allows it in the future to issue subordinated notes that will incorporate a non-viability loss-absorbing feature.

In accordance with its rating criteria, the agency will rate these notes two notches below Westpac's stand-alone credit profile of a, reflecting: The securities' risk of subordination; and a contingency clause, under which Westpac must convert the notes to common equity or write them off in the unlikely event that a non-viability trigger is activated.

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