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Moody's assigns Aa2 rating to DBS Group Holdings' senior unsecured notes

July 10, 2014

-- Moody's Investors Service has assigned a Aa2 foreign currency debt rating to the proposed USD benchmark senior unsecured notes drawdown, issued by DBS Group Holdings Limited's (DBSH,

Aa2 stable) from its USD15 billion Global medium-term note (GMTN) program.

The rating outlook is stable.

The rating is subject to the receipt of final documentation, the terms and conditions of which are not expected to change in any material way from the draft documents reviewed by Moody's.


DBSH's Aa2 senior unsecured debt rating is in line with DBSH's issuer rating of Aa2 and reflects the good credit profile of DBSH's banking subsidiary, DBS Bank Ltd. (deposits Aa1 stable, BFSR B / BCA aa3 stable), which is the sole directly held operating subsidiary of DBSH.

The ratings account for DBSH's status as a financial holding company. As a result of structural subordination, the senior unsecured debt rating of DBSH is one notch lower at Aa2 than the similar debt rating of DBS Bank at Aa1.

As of 31 December 2013, investments in DBS Bank accounted for 89% of DBSH's assets, with cash and other liquid assets accounting for the remainder. As such, DBSH's ratings largely reflect the performance of DBS Bank.

On a fully consolidated basis, DBS Group benefits from DBS Bank's sound credit metrics with a Common Equity Tier 1 ratio of 13.1% (under transitional Basel III rules) at the end of March 2014 and a track record of consistent earnings and sound asset quality.

The ratings also reflect the low leverage evident at the DBSH standalone level, having reported a double-leverage ratio of 89% at the end of 2013, which indicates a surplus of equity over the amount required to fund investments in DBS Bank.

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Source: EMBIN (Emerging Markets Business Information News)

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