Fitch Assigns Credit Suisse HoldCo's Senior Debt Final Ratings of 'A'
The assignment of the final ratings follows the completion of the bond issues and receipt of documents conforming to the information previously received. The final ratings are the same as the expected ratings assigned on 23 March 2015.
KEY RATING DRIVERS
The notes are rated in line with the Issuer Default Rating (IDR) of the guarantor, Credit Suisse Group AG (A/Stable/a). The notes have been issued by Credit Suisse Group Funding (Guernsey) Limited, a non-Swiss entity, to avoid triggering Swiss withholding tax on interest payments.
The notes are direct, unsecured and senior obligations of the issuer and benefit from a full, unconditional and unsubordinated guarantee by Credit Suisse Group AG.
The terms of the notes include acknowledgement of Swiss resolution power with note holders agreeing to be bound by any Swiss regulatory bail-in power including the partial or full write-down and cancellation of interest and/or principal.
As per the notes' documentation, Credit Suisse Group AG intends to downstream the proceeds to its operating subsidiaries (including Credit Suisse AG) in the form of internal notes with identical subordination (senior unsecured) and maturity, therefore avoiding the build-up of additional double leverage at holding company level.
RATING SENSITIVITIES
The notes are rated in line with Credit Suisse Group AG's Long-term IDR and are therefore primarily sensitive to any change to the Long-term IDR. Currently, Credit Suisse Group AG's and Credit Suisse AG's IDRs are equalised as per relevant criteria.
Additional double leverage at the holding company, for instance through mismatches in downstreaming the proceeds to its operating entities, could result in its IDR being rated below Credit Suisse AG's IDR, and hence a downgrade of the securities.
Credit Suisse has stated that it intends to issue bail-in senior debt out of its holding company, which is in line with the Swiss Financial Market Supervisory Authority's (FINMA) preference for a single-point-of entry approach to bank resolution. Increasing debt volumes at holding company level in combination with the creation of separately capitalised subsidiaries, including a Swiss bank subsidiary, could in the medium term change the relative position of creditors of different group entities, which would be reflected in the entities' issuer and issue ratings.
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