OREANDA-NEWS. Fitch Ratings expects to rate Synovus Financial Corp.'s (SNV) subordinated debt issuance due in 2025 'BB+'. Proceeds of the issuance are for general corporate purposes.

Fitch recently upgraded SNV's long-term Issuer Default Rating and viability rating (VR) to 'BBB-/bbb-' from 'BB+/bb+'. For more information pertaining to that rating action, please see the press release titled 'Fitch Upgrades Synovus Financial Corp. to 'BBB-'; Outlook Stable' (Nov. 19, 2015).

KEY RATING DRIVERS

SUBORDINATED DEBT AND OTHER HYBRID SECURITIES
The notes will be subordinated in right of payment to the payment of SNV's existing and future senior debt. The expected subordinated debt rating is notched one level below its VR of 'bbb-' for loss severity. This is in accordance with Fitch's criteria and assessment of the instruments non-performance and loss severity risk profiles

RATING SENSITIVITIES

SUBORDINATED DEBT AND OTHER HYBRID SECURITIES
SNV's subordinated debt ratings are broadly sensitive to the same considerations that might affect its VR.

As communicated in the aforementioned press release (dated Nov. 19, 2015), further upward movement of the company's VR is considered limited in the near to medium term. Fitch expects earnings and asset quality to improve over the rating time horizon. This expectation is incorporated into the recent rating action. Fitch could take adverse rating action should earnings and asset quality improvement not come to fruition as expected evidenced by flat-to-deteriorating ROA or reversal in asset quality trends.

The recent action also incorporates Fitch's expectation that SNV will begin to more seriously seek merger and acquisition (M&A) opportunities in order to build out its franchise and potentially gain further operating efficiencies. Fitch expects SNV's M&A activity to be absorbed effectively, reasonable in size, in geography and within the bank's core competencies. To the extent that Fitch observes SNV partaking in M&A activity that does not fit these attributes and/or results in earnings and capital metrics that are not commensurate with its rating level, Fitch could take negative rating action.

Moreover, should wholesale funding revert back to the level it was leading up to the 2007-2009 financial crisis, negative rating action is likely.

Over the long-term, SNV could see upward rating movement given the bank's solid franchise in its primary operating markets. Improvement in SNV's ratings over the long term would be predicated on the maintenance of sound risk appetite leading to asset quality metrics more in-line with higher rated peers as well as earnings performance (both by level and revenue mix) improving to above peer averages.

Fitch expects to assign the following rating:

Synovus Financial Corp.:
--Subordinated debt due 2025 'BB+(EXP)'.