DBRS Assigns Provisional Ratings to BCP’s EUR 25 billion Euro Note Programme

DBRS Ratings GmbH (DBRS) assigned provisional ratings to Banco Comercial Português’s (BCP or the Bank) EUR 25 billion Euro Note Programme (or the Programme). The Programme, which is for the issuance of Unsubordinated and Subordinated Notes, includes the newly debt instrument of Senior Non-Preferred, introduced by Portuguese Law No. 23/2019 in March 2019.

In line with the Debt Obligations Framework set out in DBRS’s Global Methodology for Rating Banks and Banking Organisations (July 2018), Senior notes, issued under the Programme, will be rated BB (high), in line with the Bank’s Long-Term Issuer Rating and Intrinsic Assessment (IA) of BB (high). The Senior Non-Preferred Notes will be rated BB, one notch below BCP’s IA, whilst the Subordinated Notes will be rated BB (low), two notches below BCP’s IA. All ratings have a Positive Trend. A full list of rating actions is included at the end of this press release.

The ratings, which are based on a draft version received by DBRS of the Bank’s Offering Circular for the EUR 25 billion Euro Note Programme, are assigned on a provisional basis. The ratings will be finalised with the release of the final version of the Bank’s offering circular.

RATING DRIVERS
The ratings are sensitive to any change in BCP’s Intrinsic Assessment (IA) which is currently at BB (high). The IA could be raised if the Bank continues to reduce NPLs at a meaningful rate and to improve profitability in Portugal, through core revenue growth and lower cost of risk. Negative pressure on the IA could arise if there is a significant deterioration in asset quality and capital, and the Trend could also return to Stable if the Bank is unable to deliver planned reductions in NPLs.

Notes:

All figures are in Euros unless otherwise noted.

The principal applicable methodology is the Global Methodology for Rating Banks and Banking Organisations (July 2018). This can be found at: http://www.dbrs.com/about/methodologies.

The sources of information used for this rating include SNL Financial, company disclosures and draft Offering Circular. DBRS considers the information available to it for the purposes of providing this rating to be of satisfactory quality.

This rating concerns a newly issued financial instrument. This is the first DBRS rating on this financial instrument.

DBRS does not audit the information it receives in connection with the rating process, and it does not and cannot independently verify that information in every instance.

Generally, the conditions that lead to the assignment of a Negative or Positive Trend are resolved within a twelve month period. DBRS’s outlooks and ratings are under regular surveillance.

For further information on DBRS historical default rates published by the European Securities and Markets Authority (“ESMA”) in a central repository, see:
http://cerep.esma.europa.eu/cerep-web/statistics/defaults.xhtml

Ratings assigned by DBRS Ratings GmbH are subject to EU and US regulations only.

Lead Analyst: Nicola De Caro, Senior Vice President, Global FIG
Rating Committee Chair: Elisabeth Rudman, Managing Director, Head of EU FIG, Global FIG
Initial Rating Date: June 10, 2011
Most Recent Rating Update: March 28, 2019

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