Fitch Ratings affirmed Rabobank’s Long-Term Issuer Default Rating at AA-, Outlook to Negative from Stable
Fitch Ratings has affirmed Cooperatieve Rabobank U.A.’s Long-Term Issuer Default Rating (IDR) at ‘AA-’ and its Viability Rating (VR) at ‘a+’. Fitch has also revised the Outlook on the Long-Term IDR to Negative from Stable.
Please note that this Outlook revision has a ‘technical’ reason closely related to Fitch’s bank rating methodology. Currently, Rabobank's Long-Term IDR and senior debt ratings (including senior non-preferred debt) benefit from a one-notch uplift above its VR due to a large buffer of qualifying junior debt (QJD).
According to Fitch, the Outlook revision of today ‘reflects the increased uncertainty over whether the qualifying junior debt buffer will be maintained at a level sufficient to protect all senior obligations, including senior non-preferred debt, from default'. In addition, according to Fitch, the Outlook revision also reflects the likely regulatory-driven increase of Rabobank’s risk-weighted assets (RWAs).
In Fitch’s view Rabobank’s ratio of QJD to RWAs could therefore decrease to below the threshold that applies for the one-notch uplift. Consequently, Rabobank’s (layer of) senior non-preferred debt would in such case no longer benefit from a one-notch uplift above Rabobankʼs VR.
- Fitch press release (25 October 2019)