OREANDA-NEWS. Fitch Ratings has assigned ICCREA Banca's (BBB/Negative/bbb) EUR106.6m subordinated Tier 2 debt issue maturing in 2025 a final rating of 'BBB-'. The rating is in line with the expected rating assigned on 12 June 2015.

The notes have an original maturity date in 2025, with an issuer call option in 2020. They pay floating rate coupons every six months at six month EURIBOR + 3.5% per annum until the reset date.

The notes qualify as Tier 2 capital under the Capital Requirements Directive IV. They contain contractual loss absorption features, which will be triggered at the point of non-viability of the bank, with no equity conversion feature.

The notes can be redeemed in whole but not in part, at their principal amount together with interest accrued upon the occurrence of a change in the regulatory classification of the notes that would likely result in their exclusion, in whole, as Tier 2 capital of ICCREA Banca.

The subordinated notes are transferable on the Luxemburg Stock Exchange.

KEY RATING DRIVERS
The notes are rated one notch below ICCREA Banca's Viability Rating (VR) of 'bbb', in accordance with Fitch's Global Bank Rating criteria. The notching includes one notch for loss severity and zero notches for non-performance risk.

The one notch for loss severity reflects the below-average recovery prospects for the notes in case of non-viability. Fitch has applied zero notches for incremental non-performance risk, as the write-down of the notes will only occur once the point of non-viability is reached and there is no coupon flexibility prior to non-viability.

RATING SENSITIVITIES
The subordinated debt rating is sensitive to the same factors that may affect ICCREA Banca's VR.

The notes' rating is also sensitive to a change in notching should Fitch change its assessment of loss severity or non-performance risk.