Moody’s rates MyState debt Baa1, Baa3

Moody's Investors Service said it assigned a long-term senior unsecured rating of provisional Baa1, a short-term rating of provisional Prime-2 and a subordinated rating of provisional Baa3 to MyState Bank Ltd.’s (Baa1 stable) A$2 billion debt issuance program.

The subordinated notes issued off th program will qualify as Tier 2 capital under the prudential standards set out by the Australian Prudential Regulation Authority (APRA) and are subject to write-off and conversion at the point of non-viability.

The bank's parent company – MyState Ltd. (unrated) – may also issue debt under the program.

Moody’s said the long-term and short-term senior unsecured rating of provisional Baa1/provisional P-2 are aligned with the bank's existing Baa1/P-2 issuer ratings, which are supported by the bank's very strong asset quality and conservative underwriting, but constrained by its geographic concentration, sizeable exposure to wholesale funding, and ongoing profitability pressures.

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