Market Overview

Fitch Expects to Rate Itau Unibanco Holding's Tier II USD Sub Notes 'BBB(Exp)'

Share:
NEW YORK--(BUSINESS WIRE)--

Fitch Ratings expects to assign Itau Unibanco Holding S.A.'s (IUH) upcoming 2023 subordinated notes a rating of 'BBB(exp)'. The final rating is contingent upon the receipt of final documents conforming to information already received.

The notes will be issued by IUH's Grand Cayman branch. Principal will mature in 2023, and interest payments will be made semi-annually. The notes, part of a USD10 billion global medium-term note program, will carry a fixed interest rate. The interest rate and principal amount should be set at time of issuance. The net proceeds will be used by IUH for general corporate purposes.

The notes will rank at least equally with similar subordinated debt and carry a cumulative coupon deferral mechanism that can be exercised if necessary. A deferral will only occur if IUH is noncompliant with its regulatory capital requirement.

As per Fitch's rating criteria, the expected rating of this Tier II subordinated debt should be two notches below IUH's Viability Rating (VR) of 'a-', one notch lower due to Loss Severity features and its subordinated status, and a one-notch deduction due to moderate risk of non-performance. IUH's VR reflects Fitch's assessment of its high credit quality and strong prospects for ongoing viability. The ratings also reflect IUH's broad and diversified franchise, which is ranked among the leaders of various segments of the Brazilian financial system. The ratings also consider IUH's track record for solid performance, its robust risk controls, its ample liquidity and greater diversification compared with local peers as a result of its overseas presence.

Controlled by the Egydio de Souza Aranha and Moreira Salles families, IUH is the largest private financial conglomerate in Brazil and Latin America. Its main subsidiary, Itau Unibanco S.A., is one of Brazil's leading retail banks.

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Rating Bank Regulatory Capital and Similar Securities' (Dec. 15, 2011);

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

2011);

--'Itau Unibanco Holding S.A. (Jan. 19, 2012).

Applicable Criteria and Related Research:

Rating Bank Regulatory Capital and Similar Securities

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=656371

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686181

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 Ratings
Primary Analyst
Robert Stoll, +1 212-908-9155
Director
Fitch, Inc.
One State Street Plaza
New York, NY 10004
or
Secondary Analyst
Pedro Gomes, +55-11-4504-2600
Director
or
Committee Chairperson
Franklin Santarelli, +1 212-908-0739
Managing Director
or
Media Relations:
Elizabeth Fogerty, +1 212-908-0526
Email: elizabeth.fogerty@fitchratings.com

















View Comments and Join the Discussion!