Scope Ratings today assigned ratings to Tier 2 securities issued in 2015-2016 by EU banks already rated publicly. All of these securities, which were issued publicly (no private placements are included), qualify as Tier 2 capital under CRD IV-CRR. Scope has in the past rated a few Tier 2 securities of EU banks, and today’s rating action broadens considerably the agency’s rating coverage for this type of capital instrument.

The aggregate amount of Tier 2 capital rated today – 38 securities issued by 16 banks in nine EU countries – is equivalent to nearly EUR 40bn. These ratings were not solicited by the issuers, but a majority of issuers have been participating in Scope’s rating process.

Scope says that it positioned the ratings of these Tier 2 securities two notches below the respective banks’ ratings for senior unsecured debt eligible for TLAC and/or MREL. This approach was detailed last May in Scope’s updated methodologies for bank ratings and bank capital securities ratings.

The following ratings were assigned:

Banque Federative du Credit Mutuel (BFCM) – EUR 700m 1.875% 2026 (XS1512677003): BBB+, Stable Outlook
BFCM – EUR 1bn 2.375% 2026 (XS1385945131): BBB+, Stable Outlook
BFCM – EUR 1bn 3% 2025 (XS1288858548): BBB+, Stable Outlook

Barclays PLC – USD 2bn 5.2% 2026 (US06738EAP07): BBB+, Stable Outlook
Barclays PLC – EUR 1.25bn 2.625% (XS1319647068): BBB+, Stable Outlook

BNP Paribas SA – EUR 750m 2.25% 2027 (XS1470601656): A-, Stable Outlook
BNP Paribas SA – EUR 1.5bn 2.375% 2025 (XS1190632999): A-, Stable Outlook
BNP Paribas SA – EUR 750m 2.875% 2026 (XS1378880253): A-, Stable Outlook
BNP Paribas SA – EUR 750m 2.75% 2026 (XS1325645825): A-, Stable Outlook

BPCE SA – EUR 750m 2.875% 2026 (FR0013155009): A-, Stable Outlook
BPCE SA – EUR 750m 2.75% 2027 (FR00113063385): A-, Stable Outlook
BPCE SA – EUR 375m 2.25% 2025 (FR0012633345): A-, Stable Outlook
BPCE SA – USD 400m 4.625% 2035 (FR0012674935): A-, Stable Outlook

Commerzbank – USD 400m 6% 2028 (XS1342647564): BBB, Stable Outlook
Commerzbank – EUR 1bn 4% 2026 (DE000CZ40LD5): BBB, Stable Outlook

Coöperatieve Rabobank U.A. – USD 1.5bn 4.375% 2025 (US21684AAC09): A-, Stable Outlook
Coöperatieve Rabobank U.A. – USD 1.25bn 5.25% 2045 (US21684AAD81): A-, Stable Outlook
Coöperatieve Rabobank U.A. – USD 1.5bn 3.75% 2026 (US21684AAF30): A-, Stable Outlook

Credit Agricole SA – EUR 2bn 2.625% 2027 (XS1204154410): A-, Stable Outlook

Deutsche Bank – EUR 1.25bn 2.75% 2025 (DE000DB7XJJ2): BBB-, Negative Outlook
Deutsche Bank – EUR 750m 4.5% 2026 (DE000DL40SR8): BBB-, Negative Outlook
Deutsche Bank – USD 1.5bn 4.5% 2025 (US251525AP63): BBB-, Negative Outlook

DNB Bank ASA – SEK 3bn FRN 2025 (XS1239410043): A-, Stable Outlook
DNB Bank ASA – SEK 1bn 1.97% 2025 (XS1239410712): A-, Stable Outlook

HSBC Holdings PLC – USD 1.5bn 4.375% 2026 (US404280BH13): A, Stable Outlook
HSBC Holdings PLC – USD 1.5bn 4.25% 2025 (US404280AU33): A, Stable Outlook
HSBC Holdings PLC – EUR 1.5bn 3% 2025 (XS1254428896): A, Stable Outlook

ING Bank NV – EUR 1bn 3% 2028 (XS1394764929): BBB+, Positive Outlook

KBC Group NV – EUR 750m 1.875% 2027 (BE0002485606): BBB+, Stable Outlook

Nordea Bank AB – EUR 1bn variable rate note 2026 (XS1486520403): A-, Stable Outlook
Nordea Bank AB – EUR 750m variable rate note 2025 (XS1317439559): A-, Stable Outlook
Nordea Bank AB – SEK 2.3bn variable rate note 2025 (XS1292433767): A-, Stable Outlook

Santander Issuances SA – USD 1.5bn 5.179% 2025 (US80281TAE82): A-, Stable Outlook
Santander Issuances SA – EUR1.5bn 3.25% 2026 (XS1384064587): A-, Stable Outlook
Santander Issuances SA – EUR1.5bn 2.5% 2025 (XS1201001572): A-, Stable Outlook

Societe Generale SA – EUR 1.25bn 2.625% 2025 (XS1195574881): BBB+, Stable Outlook
Societe Generale SA – USD 500m 5.1% 2036 (XS1432505128): BBB+, Stable Outlook

Unicredit SPA – EUR 750m 4.375% 2027 (XS1426039696): BBB-, Stable Outlook

Today’s rating action also led to adjustments on existing ratings of four specific bank securities. The initial ratings on these four securities were based on incorrect terms and conditions provided by a major data supplier. These adjustments are as follows:

Banco Santander SA – EUR460m Internationalisation bond 2019 (ES0313900385): withdrawn

BBVA SA – EUR 100m FRN 2017 (ES0214973069): withdrawn

DNB Bank SA – NOK 1.25bn FRN 2023 (NO0010682511): downgrade to A-, Stable Outlook

Nordea Bank AB – SEK1.7bn FRN 2025 (XS1292434146): downgrade to A-, Stable Outlook

Legal and regulatory disclosures

Important information
Information pursuant to Regulation (EC) No 1060/2009 on credit rating agencies, as amended by Regulations (EU) No. 513/2011 and (EU) No. 462/2013

Responsibility
The party responsible for the dissemination of the financial analysis is Scope Ratings AG, Berlin, District Court for Berlin (Charlottenburg) HRB 161306 B, Executive Board: Torsten Hinrichs (CEO), Dr Stefan Bund and Dr Sven Janssen.
The rating analysis for securities issued by Banque Federative du Credit Mutuel (BFCM), Barclays PLC, BNP Paribas SA, BPCE SA, Credit Agricole SA, DNB Bank ASA, DNB Bank SA, HSBC Holdings PLC, KBC Group NV and Societe Generale SA has been prepared by Pauline Lambert, Executive Director.
The rating analysis for securities issued by Commerzbank, Coöperatieve Rabobank U.A., Deutsche Bank and ING Bank has been prepared by Michaela Seimen Howat, Executive Director.
The rating analysis for securities issued by Nordea Bank AB, Santander Issuances SA, Unicredit SPA and BBVA SA has been prepared by Marco Troiano, Director. Responsible for approving all rating actions: Sam Theodore, Managing Director.

The rating outlook indicates the most likely direction of the rating if the rating were to change within the next 12 to 18 months. A rating change is, however, not automatically ensured.

Rating history
Instrument | ISIN | Date | Rating action | Rating
ES0313900385| 15 October 2015 | New | A+
ES0214973069| 13 January 2015 | New | A
ES0214973069| 12 March 2015 | Affirmed | A
NO0010682511| 19 November 2014 | new* | A+
NO0010682511| 12 March 2015 | Affirmed | A+
XS1292434146| 23 October 2015 | New | A+

*Press release was amended on 20.12.2016. The rating action type for the rating action NO0010682511 for the 19 November 2014 has been corrected to “new”. In the original press release the rating action type “affirmation” was published.

All other ratings concern financial instruments which were evaluated for the first time by Scope Ratings AG.

Information on interests and conflicts of interest
The rating was prepared independently by Scope Ratings and without a mandate (unsolicited rating) and with issuer participation for instruments issued by Barclays PLC, BNP Paribas SA, Credit Agricole SA, DNB Bank ASA, HSBC Holdings PLC, KBC Group NV, Societe Generale SA, Commerzbank, Coöperatieve Rabobank U.A., Nordea Bank AB, Santander Issuances SA and BBVA SA.
The rating was prepared independently by Scope Ratings and without a mandate (unsolicited rating) and without participation of the issuer for instruments issued by Banque Federative du Credit Mutuel (BFCM), BPCE SA, Deutsche Bank, ING Bank and Unicredit SPA.
As at the time of the analysis, neither Scope Ratings AG nor companies affiliated with it hold any interests in the rated entity or in companies directly or indirectly affiliated to it. Likewise, neither the rated entity nor companies directly or indirectly affiliated with it hold any interests in Scope Ratings AG or any companies affiliated to it. Neither the rating agency, the rating analysts who participated in this rating, nor any other persons who participated in the provision of the rating and/or its approval hold, either directly or indirectly, any shares in the rated entity or in third parties affiliated to it. Notwithstanding this, it is permitted for the above-mentioned persons to hold interests through shares in diversified undertakings for collective investment, including managed funds such as pension funds or life insurance companies, pursuant to EU Rating Regulation (EC) No 1060/2009. Neither Scope Ratings nor companies affiliated with it are involved in the brokering or distribution of capital investment products. In principle, there is a possibility that family relationships may exist between the personnel of Scope Ratings and that of the rated entity. However, no persons for whom a conflict of interests could exist due to family relationships or other close relationships will participate in the preparation or approval of a rating.

Key sources of information for the rating
Website of the rated entity/issuer| Annual reports | quarterly reports of the rated entity/issuer | Current performance record | Data provided by external data providers | External market reports | Press reports | other public information.
Scope Ratings considers the quality of the available information on the evaluated company to be satisfactory. Scope ensured as far as possible that the sources are reliable before drawing upon them, but did not verify each item of information specified in the sources independently.

Examination of the rating by the rated entity prior to publication
Prior to publication, the rated entity was given the opportunity to examine the rating and the rating drivers, including the principal grounds on which the credit rating or rating outlook is based. The rated entity was subsequently provided with at least one full working day, to point out any factual errors, or to appeal the rating decision and deliver additional material information. Following that examination, the ratings were not modified.

Methodology
The methodologies applicable for this rating “Bank Rating Methodology” (May 2016) & “Bank Capital Instruments Rating Methodology” (May 2016) are available on www.scoperatings.com. The historical default rates of Scope Ratings can be viewed on the central platform (CEREP) of the European Securities and Markets Authority (ESMA): http://cerep.esma.europa.eu/cerep-web/statistics/defaults.xhtml. A comprehensive clarification of Scope’s default rating, definitions of rating notations and further information on the analysis components of a rating can be found in the documents on methodologies on the rating agency’s website.

Conditions of use / exclusion of liability
© 2016 Scope SE & Co. KGaA and all its subsidiaries including Scope Ratings AG, Scope Analysis, Scope Investor Services GmbH (collectively, Scope). All rights reserved. The information and data supporting Scope’s ratings, rating reports, rating opinions and related research and credit opinions originate from sources Scope considers to be reliable and accurate. Scope cannot, however, independently verify the reliability and accuracy of the information and data. Scope’s ratings, rating reports, rating opinions, or related research and credit opinions are provided “as is” without any representation or warranty of any kind. In no circumstance shall Scope or its directors, officers, employees and other representatives be liable to any party for any direct, indirect, incidental or otherwise damages, expenses of any kind, or losses arising from any use of Scope’s ratings, rating reports, rating opinions, related research or credit opinions. Ratings and other related credit opinions issued by Scope are, and have to be viewed by any party, as opinions on relative credit risk and not as a statement of fact or recommendation to purchase, hold or sell securities. Past performance does not necessarily predict future results. Any report issued by Scope is not a prospectus or similar document related to a debt security or issuing entity. Scope issues credit ratings and related research and opinions with the understanding and expectation that parties using them will assess independently the suitability of each security for investment or transaction purposes. Scope’s credit ratings address relative credit risk, they do not address other risks such as market, liquidity, legal, or volatility. The information and data included herein is protected by copyright and other laws. To reproduce, transmit, transfer, disseminate, translate, resell, or store for subsequent use for any such purpose the information and data contained herein, contact Scope Ratings AG at Lennéstraße 5 D-10785 Berlin.

Rating issued by
Scope Ratings AG, Lennéstrasse 5, 10785 Berlin