News Column

Fitch Expects to Rate Banco General's Senior Unsecured Notes 'BBB+(exp)'

June 9, 2014



NEW YORK--(BUSINESS WIRE)-- Fitch Ratings expects to rate Banco General's(BG) upcoming Swiss Franc senior unsecured notes 'BBB+(exp)'. The CHF 180 million notes will mature in 2018 and carry a fixed interest rate of 1.625%; interest payments will be made semi-annually. The final rating is contingent upon the receipt of final documents conforming to information already received.

KEY RATING DRIVERS

BG has a long-term Issuer Default Ratings (IDR) of 'BBB+'; driven by its Viability Rating (VR), which is currently at 'bbb+'. BG's ratings reflect the bank's solid franchise, sound and consistent performance, robust capital levels, conservative policies, good asset quality and reserves, ample deposit base and well diversified portfolio. Fitch's view of BG's creditworthiness is tempered by the heightened competition it faces and the lack of a lender of last resort.

The notes rank pari passu with the bank's future and existing senior unsecured debt and will be effectively subordinated to all of BG's secured indebtedness with respect to the value of its assets securing that indebtedness, and certain direct, unsecured general obligations that in case of insolvency are granted preferential treatment pursuant to Panamanian law.

BG will use the proceeds for general business purposes. Considering the bank's solid capital levels and sound profitability, the impact on the bank's leverage is not deemed significant by Fitch.

RATING SENSITIVITIES

The notes' rating is sensitive to any changes in BG's VR. BG is currently rated one notch above Panama's sovereign rating; hence, Fitch considers that the upside potential for BG's VR and IDRs is limited over the foreseeable future.

In turn, these ratings could be negatively affected if asset quality deteriorates materially (impaired loans above 2.5% and/or reserve coverage below 100%), performance weakens resulting in an operating ROA below 1.5%, and/or capitalization worsens to a FCC ratio below 12%.

Fitch currently rates BG as follows:

--Long-term foreign currency IDR 'BBB+', Stable Outlook;

--Short-term foreign currency IDR 'F2';

--Viability Rating 'bbb+';

--Support rating '5';

--Support floor 'NF';

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Financial Institutions Rating Criteria' (Jan. 31, 2014).

Applicable Criteria and Related Research:

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=732397

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=833657

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.



Fitch Ratings

Primary Analyst

Diego Alcazar

Director

+1-212-908-0396

Fitch Ratings, Inc.

33 Whitehall St

New York, NY 10004

or

Secondary Analyst

Rene Medrano

Senior Director

+507-2516-6610

or

Committee Chairperson

Alejandro Garcia

Senior Director

+52-81-8399-9146

or

Media Relations

Elizabeth Fogerty, New York, +1-212-908-0526

elizabeth.fogerty@fitchratings.com

Source: Fitch Ratings


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