(The following statement was released by the rating agency) LONDON, July 23 (Fitch)
Fitch Ratings has assigned First Bank of Nigeria Ltd's (FBN; B+/Stable) planned subordinated debt (Tier 2 notes) a 'B-(EXP)'expected rating.
The subordinated notes are issued by FBN Finance Company B.V (FBNF) as a special purpose vehicle. The structure of the notes is not yet finalised, and the final rating is contingent upon the receipt of final documents conforming to information already received.
KEY RATING DRIVERS
The notes are subordinated but have no coupon flexibility, principle loss absorption of equity conversion features. They qualify as Tier 2 regulatory capital under current Central Bank of Nigeria guidelines. Fitch has rated the notes one notch below FBN's Viability Rating of 'b' to reflect below average loss severity for subordinated relative to senior debt. No additional notches for non-performance risk have been applied.
The notes' rating is sensitive to a change in FBN's VR. In addition, the notching of the rating against the bank's VR could potentially also widen if Fitch believed that the recoveries available to the subordinated note holders in the event of a default of the bank would be lower than currently assumed.
+44 20 3530 1618
Fitch Ratings Limited
30 North Colonnade London E14 G5N
+44 20 3530 1330
+44 20 3530 1075
Hannah Huntly, London,
Tel: +44 20 3530 1153,
Additional information is available on www.fitchratings.com Applicable criteria, 'Global Financial Institution Rating Criteria' dated 15 August 2012 and 'Assessing and RatingBanks Subordinated and Hybrid Securities' dated 5 December 2012, are available at www.fitchratings.com. Applicable Criteria and Related Research: Global Financial Institutions Rating Criteria here Assessing and Rating Bank Subordinated and Hybrid Securities here Additional Disclosure Solicitation Status here