News Column

Moody's continues review for upgrade on CorpBanca's and CorpGroup Banking's ratings

June 15, 2014



Moody's Investors Service has said today that

the ratings of CorpBanca (deposits and senior debt Baa3, review up, BFSR

D+ review up/BCA ba1) and its holding company, CorpGroup Banking S.A.,

(issuer and senior debt B1, review up) remain on Watchlist. The review

status was initiated on 31 January 2014.

Moody's said it expects to complete the review upon the closing of the

transaction announced on 29 January 2014, whereby CorpBanca's controlling

shareholder, CorpGroup, agreed to merge the bank with Itaת Unibanco

S.A.'s (deposits Baa1/Baa2 stable, BFSR C- stable/BCA baa1) Chilean

subsidiary, Banco Itaת Chile (deposits A3 stable, BFSR C-stable/BCA

baa2) in a stock-for-stock transaction to create Banco Itaת CorpBanca.

Moody's understands that the merger transaction remains on course and

that the counterparties intend to complete the deal by the fourth quarter

of 2014, once the necessary approvals are obtained, and in accordance

with the previously announced time frames.

RATINGS RATIONALE

The review status reflects the fact that the merger and the transfer of

control must be approved by Chile's banking regulators, the

Superintendency of Banks and the Central Bank of Chile, as well as by

the Colombian, Panamanian, and US banking regulators. The Central Bank of

Brazil must approve Itaת Unibanco's increased investment in Chile via a

capital infusion of US$ 652 million in Banco Itaת Chile prior to the

merger. The ratings of CorpGroup Banking remain on review for upgrade as

they are anchored on CorpBanca's standalone rating.

Moody's continues to expect that the proposed merger of CorpBanca and

Banco Itau Chile and its association with Itau Unibanco will strengthen

the bank's market presence across multiple customer segments in Chile's

highly competitive banking market as well as to facilitate scale

efficiencies, thereby increasing its earnings potential. Itau's

experience in integrating acquisitions, its successful presence and brand

identity in Chile, as well as its partnership and co-management with

existing shareholders will allow the bank to mine local management's

expertise and relationships.

Based in Santiago, CorpBanca was the fifth largest bank in Chile with US$

34.9 billion (CLP 19.2 trillion) of consolidated assets and $3.2 billion

in shareholders' equity as of March 31, 2014. CorpGroup Banking reported

total consolidated assets of $33.3 billion and total net equity of $3.0

billion as of 31 December 2013.


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Source: EMBIN (Emerging Markets Business Information News)


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