Moody's gives LHV Baa3 unsecured rating

Moody's Investors Service said it gave a Baa3 local-currency senior unsecured rating to AS LHV Group with a positive outlook.

The stand-alone senior unsecured notes are explicitly designated as senior unsecured obligations of AS LHV Group, ranking equally with other senior unsecured obligations at the holding company level and above subordinated debt instruments at the group or bank level, but under senior debt obligations at the bank level, the agency said.

“The assigned senior unsecured rating of Baa3 reflects (1) the baseline credit assessment (BCA) of baa3 assigned to the main operating subsidiary, AS LHV Pank (LHV Pank); (2) Moody's advanced loss given failure (LGF) analysis, which indicates a moderate loss severity for these instruments in the event of failure, reflecting that the senior obligations of the holding company will absorb losses ahead of the senior obligations of the operating subsidiaries, in line with the European framework for bank resolution under the Banking Recovery and Resolution Directive (BRRD); and (3) Moody's assumption of a low probability of government support for this new instrument, resulting in no uplift,” the agency said in a press release.

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