OREANDA-NEWS. Fitch Ratings has assigned Singapore-based DBS Group Holdings' (DBSH) SGD250m 3.80% Basel III-compliant Tier 2 subordinated notes due January 2028 a rating of 'A+'. The notes are issued under the group's USD30bn global medium-term note (GMTN) programme.

KEY RATING DRIVERS
The Basel III-compliant Tier 2 securities are rated one notch below DBSH's 'aa-' Viability Rating (VR) to reflect their higher loss-severity risk relative to senior unsecured instruments due to their subordinated status, the presence of a non-viability clause and the partial rather than mandatory full write-down feature.

The Monetary Authority of Singapore (MAS) has sole discretion in determining if DBSH is non-viable, and if it does so, the securities may be written down in full or in part to the extent necessary to restore the viability of DBSH (either on a standalone or consolidated basis). A write-down of the Tier 2 notes will occur only after any Additional Tier 1 securities with loss-absorption features have been fully written off, after which the Tier 2 notes would be written down pro rata with other Tier 2 instruments that contain loss-absorption features. There are no write-back features on the securities.

No additional notching has been ascribed to non-performance risk, which Fitch regards to be of minimal incremental risk relative to the VR assigned. The instruments will not qualify for equity credit under Fitch's criteria.

In the event of any winding-up proceeding, holders of these securities - and other Tier 2 securities of DBSH - rank below DBSH's senior creditors but above its ordinary shareholders, preference shareholders and holders of other DBSH's Additional Tier 1 securities (including but not limited to perpetual capital securities) in priority of claims.

RATING SENSITIVITIES
A change in DBSH's VR will have an impact on the securities rating.

DBSH's other ratings are as follows:
Long-Term Issuer Default Rating 'AA-'; Outlook Stable
Short-Term Issuer Default Rating 'F1+'
Viability Rating 'aa-'
Support Rating '5'
Support Rating Floor 'No Floor'