OREANDA-NEWS. Fitch Ratings has assigned Allied Irish Banks, Plc's (AIB; BB/Positive) Tier 2 subordinated debt a final Long-term rating of 'BB-'.

The final rating is in line with the expected rating Fitch assigned to the notes on 17 November 2015 (see "Fitch Rates Allied Irish Banks' Upcoming Tier 2 Debt 'BB-(EXP)'" at www.fitchratings.com).

KEY RATING DRIVERS
The issue is rated one notch below AIB's 'bb' Viability Rating (VR), reflecting the higher-than- average loss severity of this type of debt than senior unsecured obligations. Fitch has not applied additional notching for incremental non-performance risk relative to the VR given that loss absorption would only occur once the bank reaches the point of non-viability.

RATING SENSITIVITIES
As the securities are notched down from AIB's VR, their rating is mostly sensitive to a change in this rating. The Positive Outlook on AIB's Long-term IDR reflects Fitch's view that as improvements in the bank's capital profile and deleveraging of problematic assets continue to feed through to its credit profile, the ratings may be upgraded. However, if any of Fitch's expectations are not met, or if macroeconomic conditions reverse and cause further weakening of asset quality to the extent that impairment charges would compromise the bank's profitability and therefore capital flexibility, this would be negative for the rating.

The issue's rating is also sensitive to a change in Fitch's assessment of loss severity or non-performance risk.