Fitch Rates Industrial Subordinated Trust's Loan Participation Notes 'BB-'

Fitch Ratings has assigned Industrial Subordinated Trust's (IST) 10-year USD loan participation notes a long-term foreign currency rating of 'BB-'.

The USD150 million notes are secured by IST's sole asset, a 100% participation in and to a subordinated loan (the loan) from Bank of America to Banco Industrial (BI). As part of the transaction, Bank of America transferred its rights on the loan to IST which in turn pledged the loan rights to the indenture trustee (The Bank of New York Mellon) as collateral for the notes; thus, in Fitch's opinion, the notes attained BI's Issuer Default Rating (IDR), notched for subordination.

The notes mirror all the conditions of the loan. Principal under the notes will mature in the year 2021, and interest payments will be made semi-annually until its maturity. The notes carry a fixed interest of 8.25%. The loan will be recognized by Guatemala's regulator as Tier II capital for regulatory capital purposes.

The rating of the notes is one notch below BI's long-term IDR of 'BB' reflecting the notes subordinated status, and the fact that they effectively rank junior to all BI's present and future senior indebtedness, pari passu with all other unsecured subordinated debt and senior to BI's capital and tier I hybrid securities.

BI's current 'bb' Viability Rating and 'BB' IDRs reflect its strong local franchise, resilient asset quality and well-contained credit costs, adequate funding and liquidity, and good and stable profitability, although somewhat limited. The ratings are constrained primarily by BI's modest loss absorption capacity (capitalization and loan loss reserves), although gradually improving recently. BI is Guatemala's largest bank, with a market share of 27.5% of the banking assets by March 2011.

Fitch currently rates BI as follows:

--Foreign currency long-term IDR 'BB';

--Foreign currency short-term IDR 'B';

--Local currency long-term IDR 'BB';

--Local currency short-term IDR 'B';

--Viability Rating 'bb';

--Individual rating 'C/D';

--Support rating '3';

--Support rating floor 'BB-';

The Rating Outlook is Positive.

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

Applicable Criteria and Related Research:

--'Global Financial Institutions Rating Criteria' (Aug. 16, 2010);

--'Rating Hybrid Securities' (Dec. 29, 2009).

--'Equity Credit for Hybrids & Other Capital Securities' (Dec. 29, 2009).

Applicable Criteria and Related Research:

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=547685

Rating Hybrid Securities

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=647091

Equity Credit for Hybrids and Other Capital Securities: Market Feedback and Fitch's Responses

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=291784

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.