OREANDA-NEWS. Fitch Ratings has affirmed Portigon's Long-term Issuer Default Rating (IDR) at 'A+', Short-term IDR at 'F1+' and Support Rating (SR) at '1' and subsequently withdrawn the ratings for commercial reasons. Accordingly, Fitch will no longer provide ratings or analytical coverage for Portigon. A full list of rating actions is at the end of this rating action commentary.

KEY RATING DRIVERS - IDRs and SR
Portigon's IDRs and SR are driven by the support structure in place outlined in its binding framework agreement. The contractually binding framework agreement commits North Rhine-Westphalia (NRW), Portigon's sole ultimate owner, to be responsible for all of Portigon's losses exceeding the amount that is shared by the other stakeholders of the former WestLB AG (Portigon's previous name). Portigon's 'A+' Long-term IDR is four notches below NRW's 'AAA' IDR. The notching is driven by Fitch's view that there remains some risk, albeit highly remote, of payment disruption on Portigon's remaining obligations as the entity completes its wind-down.

Portigon is not of strategic importance for NRW, and while its support structure is very strong, it is not a guarantee. Fitch expects Portigon to continue to produce operating losses and consume its capital through its wind-down process. With a common equity Tier 1 ratio of 103.3% at end-1H15 and a shrinking balance sheet with only around EUR1.6bn in risk-weighted assets, the risk of Portigon needing further capital support from NRW is small. However, as a bank Portigon is at least theoretically subject to the implementation of the Bank Recovery and Resolution Directive in Germany (BRRD Umsetzungsgesetz).

Formalised support for Portigon is underpinned by our assessment of political and economic motivation rather than by language in legislation or contractual agreements. Fitch expects that NRW will provide timely support for Portigon (through EAA) because of the potentially large reputational and financial risks involved.

KEY RATING DRIVERS - SENIOR AND SUBORDINATED DEBT
The rating of Portigon's grandfathered senior unsecured and subordinated debt reflects the grandfathered guarantee from the form WestLB's owners, in particular NRW.

RATING SENSITIVITIES - IDRs, SENIOR DEBT AND SUPPORT RATING
Not applicable

The rating actions are as follows:

Portigon AG
Long-term IDR affirmed at 'A+'; Outlook Stable; withdrawn
Short-term IDR affirmed at 'F1+'; withdrawn
Support Rating affirmed at '1'; withdrawn
State-guaranteed/grandfathered debt: affirmed at 'AAA'; withdrawn
State-guaranteed/grandfathered subordinated debt: affirmed at 'AAA'; withdrawn.