Fitch to give BBB to Banco de Bogota notes

Fitch Ratings said it expects to assign a BBB rating, Rating Watch Negative, to Banco de Bogota's upcoming up to $1 billion 10-year subordinated notes.

The notes will pay a fixed interest rate to be set at the time of the issuance and interest payments will be made semi-annually until maturity.

Fitch currently rates Banco de Bogota's long-term foreign and local currency issuer default ratings BBB, Rating Watch Negative, and its viability rating is also bbb, Rating Watch Negative.

The notes do not meet the characteristics required to achieve any equity credit; namely, they lack coupon deferral flexibility. As such, the agency deems these notes as debt (as per its rating criteria). Accordingly, Fitch will rate the notes one notch below Banco de Bogota's viability rating. This reflects their subordinate nature and the higher than average losses that these securities typically incur in case of a default.

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