OVERSEA-CHINESE BANKING CORPORATION LIMITED
Fitch Ratings has assigned
The notes will be issued under OCBC's
Key Rating Drivers
The notes are rated two notches below OCBC's Viability Rating of 'aa-', in accordance with Fitch's Bank Rating Criteria. This reflects higher loss-severity risk relative to senior unsecured instruments stemming from the notes' subordinated status, the presence of a non-viability clause and the partial or full write-down feature at the point of non-viability.
The
No additional notching has been ascribed to non-performance risk, as Fitch regards it to be minimal relative to the Viability Rating assigned. The notes will not qualify for equity credit under Fitch's criteria.
In the event of a winding-up proceeding, holders of the notes and other OCBC Tier 2 securities will rank below the bank's senior creditors, including covered bondholders and depositors, but above the bank's ordinary shareholders, preference shareholders and holders of perpetual capital securities in priority of claims. The notes will rank equally with all subordinated debt issued by OCBC qualifying as Tier 2 capital securities.
Rating Sensitivities
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
A downgrade in OCBC's Viability Rating would result in a downgrade of the notes' rating. The notes' rating is also sensitive to a change in notching, which could arise if Fitch changes its assessment of the probability of non-performance relative to the risk captured in the Viability Rating.
Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
The rating on the notes will be upgraded if OCBC's Viability Rating is upgraded. However, positive rating momentum is limited, as the Viability Rating is already near the top in Fitch's global bank universe.
Date of Relevant Committee
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit https://www.fitchratings.com/topics/esg/products#esg-relevance-scores.
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