S&P rates Banco Santander notes BBB+

S&P said it assigned a BBB+ long-term issue rating to the inaugural up to €1.5 billion five-year second ranking senior notes that Banco Santander SA announced it soon will be issuing.

The rating is one notch below the bank's A- stand-alone credit profile, reflecting the notes’ structural subordination to existing senior obligations, the agency said.

The notes are one notch higher than non-deferrable subordinated debt issued by the bank despite the notes being subject to bail-in, S&P said. That is because the agency said it believes these notes face a lower default risk.

While neither the Spanish resolution nor the insolvency laws currently recognize the existence of different priority claims within the ordinary unsecured senior claims, the contractual terms and conditions of the issue position the ranking of the instrument between existing senior obligations of the bank and subordinated debt, S&P explained.

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