As part of its continuing efforts to rate capital securities issued by European banks, Scope Ratings has assigned ratings to AT1 securities issued by the following banks: Banco Santander SA, BBVA SA, BNP Paribas SA, Credit Suisse Group AG, HSBC Holdings plc, ING Group NV, Intesa Sanpaolo SpA, Coöperatieve Rabobank UA and Swedbank AB. The ratings are in line with existing ratings of AT1 securities issued by the referenced banks, as these securities feature similar terms and conditions.

In addition, the rating agency assigned first-time ratings of B+ with a Stable Outlook to the AT1 securities of The Royal Bank of Scotland Group plc.

Over the last three years, Scope has assigned ratings to over 80 AT1 securities.

Scope’s approach to rating AT1 securities starts with the inherent principal loss absorption and coupon cancellation risks that investors face when investing in these securities. The minimum notching down from the senior unsecured debt rating is four notches, reflecting these instruments’ deeply subordinated status in the priority of claims, their going concern loss absorption features and coupon cancellation risks.

When rating specific AT1 securities, there may be security-specific and/or issuer-specific factors that result in increased coupon cancellation and/or principal loss absorption risks and therefore further notching down beyond the minimum four would be warranted. These include distance to the combined buffer requirement, the issuer’s liability and capital structure and regulatory developments.

Furthermore, the rating agency upgraded the AT1 securities of Barclays plc by one notch to BB+/Stable from BB. The additional notching on the AT1 securities was reduced by one to reflect the progress that the group has made in restructuring and management’s demonstrated commitment to strengthening its capital position. The rating of BB+/Stable was also assigned to two additional AT1 securities issued by Barclays plc.

The referenced ratings were not solicited by the issuers although a majority of issuers have been participating in Scope’s rating process.

The following ratings have been assigned:

• Banco Santander SA 6.75% EUR 750m AT1 securities: BBB-, Stable
   
• Barclays plc 7.875% USD 1.5bn AT1 securities: BB+, Stable
• Barclays plc 7.25% GBP 1.25bn AT1 securities: BB+, Stable
   
• BBVA SA 5.875% EUR 500m AT1 securities: BB+, Stable
   
• BNP Paribas SA 6.75% USD 750m AT1 securities: BBB, Stable
   
• Credit Suisse Group AG 7.125% USD 1.5bn AT1 securities: BB+, Stable
• Credit Suisse Group AG 3.875% CHF 200m AT1 securities: BB+, Stable
   
• HSBC Holdings plc 6% USD 3bn AT1 securities: BBB, Stable
   
• ING Group NV 6.875% USD 1bn AT1 securities: BBB, Stable
   
• Intesa Sanpaolo SpA 7.75% EUR 1.25bn AT1 securities: BB+, Stable
• Intesa Sanpaolo SpA 6.25% EUR 750m AT1 securities: BB+, Stable
   
• Coöperatieve Rabobank UA 5.5% EUR 1.5bn AT1 securities: BBB-, Stable
• Coöperatieve Rabobank UA 6.625% EUR 1.25bn AT1 securities: BBB-, Stable
   
• Swedbank AB 6% USD 500m AT1 securities: BB, Stable
   
• The Royal Bank of Scotland Group plc 7.5% USD 2bn AT1 securities: B+, Stable
• The Royal Bank of Scotland Group plc 8% USD 1.15bn AT1 securities: B+, Stable
• The Royal Bank of Scotland Group plc 8.625% USD 2.65bn AT1 securities: B+, Stable

The following ratings on AT1 securities issued by Barclays plc have been upgraded by one notch:

• Barclays plc 8.25% USD 2bn AT1 securities: from BB to BB+, Stable
• Barclays plc 8% EUR 1bn AT1 securities: from BB to BB+, Stable
• Barclays plc 7% GBP 0.7bn AT1 securities: from BB to BB+, Stable
• Barclays plc 6.5% EUR 1.1bn AT1 securities: from BB to BB+, Stable
• Barclays plc 6.625% USD 1.2bn AT1 securities: from BB to BB+, Stable
• Barclays plc 7.875% GBP 1bn AT1 securities: from BB to BB+, Stable

 
Legal and regulatory disclosures

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
This report is issued by Scope Ratings AG, Berlin, District Court for Berlin (Charlottenburg) HRB 161306 B, Executive Board: Torsten Hinrichs (CEO), Dr Stefan Bund.
The rating analyses for Credit Suisse Group AG, Barclays plc, The Royal Bank of Scotland Group plc and HSBC Holdings plc were prepared by Pauline Lambert, Executive Director. Responsible for approving rating actions: Marco Troiano, Executive Director.
The rating analyses for BBVA SA, Intesa Sanpaolo SpA and Banco Santander SA were prepared by Marco Troiano, Executive Director. Responsible for approving rating actions: Pauline Lambert, Executive Director.
The rating analyses for BNP Paribas SA and Swedbank AB were prepared by Jennifer Ray, Executive Director. Responsible for approving rating actions: Pauline Lambert, Executive Director.
The rating analyses for ING Group NV and Coöperatieve Rabobank UA were prepared by Chiara Romano, Senior Analyst. Responsible for approving rating actions: Pauline Lambert, Executive Director.

Rating history
• AT1s issued by Banco Bilbao Vizcaya Argentaria SA were first rated on 09.10.2014 and last updated on 12.03.2015.
• AT1s issued by Banco Santander were first rated on 09.10.2014 last updated on 08.03.2017.
• AT1s issued by Barclays plc were first rated on 09.10.2014 last updated on 12.03.2015.
• AT1s issued by BNP Paribas SA were first rated on 15.07.2015 last updated on 04.09.2015.
• AT1s issued by Credit Suisse Group AG were first rated on 09.10.2014 last updated on 10.04.2015.
• AT1s issued by HSBC Holdings plc were first rated on 09.10.2014 last updated on 12.03.2015.
• AT1s issued by ING Group NV were first rated on 29.02.2017 last updated on 31.03.2017.
• AT1s issued by Intesa Sanpaolo SpA were first rated on 25.02.2016 last updated on 25.02.2016.
• AT1s issued by Coöperatieve Rabobank UA were first rated on 15.06.2017 last updated on 15.06.2017.
• AT1s issued by Swedbank AB were first rated on 03.07.2015 last updated on 15.06.2017.
• AT1s issued by Royal Bank of Scotland Group plc were first rated on 15.06.2017 last updated on 15.06.2017.
Individual AT1s were issued and rated after the ratings to the first AT1s were initially assigned. Individual rating history is available on the rating cards for the individual bonds.
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.
The ratings were not requested by the issuers (unsolicited rating). Ratings for AT1 securities issued by Banco Bilbao Vizcaya Argentaria SA, Banco Santander, Barclays plc, Credit Suisse Group AG, HSBC Holdings plc, Intesa Sanpaolo SpA, Coöperatieve Rabobank UA and The Royal Bank of Scotland Group were prepared with the participation of the issuers. The ratings for the AT1 securities issued by BNP Paribas SA, ING Group NV, and Swedbank AB were prepared without the participation of the issuers.

Key sources of information for the rating
Key sources: Prospectus; website of the rated entity/issuer; annual reports/semi-annual reports of the rated entity/issuer; current performance record; annual financial statements; data provided by external data providers; ; press reports / other public information.
The following substantially material sources of information were used to prepare the credit rating: public domain, the rated entity, and Scope internal sources.
Scope Ratings considers the quality of the available information on the evaluated company to be satisfactory. Scope uses information and data that it considers to be accurate and reliable. Scope cannot, however, independently verify the reliability and accuracy of such information and data.

Examination of the rating by the rated entity prior to publication
Prior to publication, the rated entities were 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 these rating actions “Bank Rating Methodology” (May 2017) and “Capital Instrument Methodology (May 2017)” 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 on www.scoperatings.com.

Conditions of use / exclusion of liability
© 2017 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