S&P rates Arion Bank notes BBB-

S&P said it assigned its BBB- long-term issue rating to the Swedish krona-denominated tier 2 nondeferrable subordinated notes of Arion Bank (BBB+/stable/A-2).

The proposed notes will be drawn from the bank's €3 billion euro medium-term note program.

The agency said the issue rating reflects an analysis of the instrument and its assessment of Arion's creditworthiness.

“As per the notes' terms and conditions, we consider the instruments to be subordinated to senior creditors' claims, and note that the instruments are available to absorb losses at the point of nonviability of the bank via statutory loss absorption,” S&P said in a news release.

“Given the lack of going-concern loss absorption, we do not expect to include the instruments in our calculation of Arion's total adjusted capital.”

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