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SENS Announcement on Fitch downgrade
FirstRand Bank Limited
(Incorporated in the Republic of South Africa)
(Registration No. 1929/001225/06)
Company code: BIFR1
(FRB or the Bank)
AMENDMENT TO FIRSTRAND BANK LIMITED’S CREDIT RATINGS
Noteholders are referred to the announcement issued by Fitch
Ratings (Fitch) on 15 January 2013, in which the agency announced
that it had downgraded by one notch the viability rating (VR) of
FRB following the recent downgrade of the South African sovereign
rating.
Fitch stated that “the downgrade of the banks' VRs reflects the
five major banks' concentration to South Africa, a high proportion
of liquid assets invested in government securities and a weakening
operating environment as indicated by the downgrade of the
sovereign rating. The sovereign rating is now effectively acting
as a cap on these banks' VRs at this rating level because of their
strong links with South Africa.”
In line with the downgrade of FRB’s VR, the Bank’s long-term
issuer default ratings (IDRs) have been downgraded to 'BBB' from
'BBB+' in consequence of the fact that the Bank’s IDRs are driven
by the VR. The agency assigned a stable outlook to FRB’s IDRs.
Fitch affirmed the national ratings of FRB stating that “National
ratings reflect the creditworthiness of an issuer relative to the
best credit in the country,” and that, “because the downgrades of
the local currency IDRs of the major banking groups, are driven by
the weakening operating environment, their relative
creditworthiness has not weakened.”
The downgrade of FRB’s support rating (SR) and support rating
floor (SRF) is perceived to “reflect a moderate probability of
support from the South African authorities following the sovereign
downgrade. The SRs and SRFs would be sensitive to any perceived
reduction in the willingness or ability of the South African
authorities to support banks.”
SUMMARY OF RATING ACTIONS:
Long-term foreign currency IDR: downgraded to 'BBB' from 'BBB+';
Outlook Stable
Long-term local currency IDR: downgraded to 'BBB' from 'BBB+';
Outlook Stable
Short-term foreign currency IDR: downgraded to 'F3' from 'F2'
Viability Rating: downgraded to 'bbb' from 'bbb+'
Support Rating: downgraded to '3' from '2'
Support Rating Floor: downgraded to 'BB+' from 'BBB-'
National Long-term rating affirmed at 'AA(zaf)'; Outlook Stable
National Short-term rating affirmed at 'F1+(zaf)'
Senior unsecured notes: Long-term foreign currency rating
downgraded to 'BBB' from 'BBB+';
Short-term foreign currency downgraded to 'F3' from 'F2'; National
Long-term rating affirmed at 'AA(zaf)'
Subordinated notes: affirmed at 'AA-(zaf)'
Upper tier 2 notes: affirmed at 'A(zaf)'
Please refer to the Fitch press release for any further
information.
17 January 2013
Debt Sponsor
Rand Merchant Bank (A division of FirstRand Bank Limited)
Date: 17/01/2013 05:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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