OREANDA-NEWS. June 30, 2015. Fitch Ratings considers Banco Daycoval's decision to delist the bank and buy back the 61.6 million of its free-floating shares as neutral to its ratings. See the full list of ratings at the end of this press release.

On June 24, 2015, Banco Daycoval's (Daycoval: 'BBB-' Issuer Default Rating) controlling group announced it intends to take full control and delist the bank through a tender offer to repurchase the publicly traded shares (free-float), which represented 25,11% of the bank's equity in March 2015. Daycoval is controlled by the founding Dayan family and, since 2007, has been listed in the level 2 of Corporate Governance BM&FBovespa.

The decision is based on the management and controlling shareholders' assessment that the low liquidity of its publicly traded shares no longer justifies maintaining the bank as a public entity and is very costly due to reporting and other regulatory requirements. Daycoval has around BRL600 million or roughly 25% of its equity in free float but this position is heavily concentrated in a handful of shareholders. Daycoval expects to pay up to a 30% premium over last closing share price, equivalent to an acquisition price of BRL10 per share (almost 1.0x book value).

Given Daycoval's comfortable liquidity and capitalization positions (Fitch Core Capital of 17.6% and liquid assets of BRL2.7 billion in March 2015) even in a scenario where the bank acquires 100% of the repurchased shares, Fitch does not expect the bank's capital and liquidity position to fall below levels commensurate with its current rating level..

Fitch will monitor the evolution of this transaction, and the ultimate effect of the deal in the bank's financial profile. When and if an agreement with minority shareholders is achieved, the transaction will still be subject to regulators' approvals

Fitch currently rates Daycoval as follows:

--Long-term foreign and local currency Issuer Default Ratings (IDRs) 'BBB-', Outlook Stable;
--Short-term foreign and local currency IDRs 'F3';
--Viability rating 'bbb-';
--Long-term national rating 'AA(bra)', Outlook Stable;
--Short-term national rating F1+(bra)';
--Support rating affirmed at '5';
--Support rating floor 'NF';
--Senior unsecured USD notes due January 2016, foreign currency rating 'BBB-'.
--Senior unsecured USD notes due March 2019, foreign currency rating 'BBB-'
--Senior unsecured BRL letras financeiras due 2015 and 2016 'AA(bra).]