Fitch assigns Eurobank tier 2 notes B-

Fitch Ratings said it published Eurobank Ergasias Services and Holdings SA's (HoldCo) upcoming 10-year subordinated tier 2 notes, which have an expected size of €300 million, expected long-term rating of B- with an RR6 recovery rating. The notes will be issued under the HoldCo's €5 billion euro medium-term note program and will qualify as tier 2 regulatory capital.

“The rating of the notes is notched off twice from the HoldCo's b+ viability rating (VR) for loss severity given their junior ranking. No notching is applied for incremental non-performance risk because write-down of the notes will only occur once the point of non-viability is reached and there is no coupon flexibility before non-viability. Poor recovery prospects given default are reflected in the recovery rating of RR6,” Fitch said in a press release.

The outlook is stable.

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