Fitch Revises Yapi Kredi's Outlook to Negative; Affirms at 'BBB'
OREANDA-NEWS. Fitch Ratings has revised the Outlooks on Yapi Ve Kredi Bankasi (YKB), Yapi Kredi Finansal Kiralama A.O. (Yapi Leasing), Yapi Kredi Faktoring A.S. (Yapi Faktoring) and Yapi Kredi Yatirim Menkul Degerler A.S. (Yapi Kredi Invest), to Negative from Stable. Their Long-term Issuer Default Ratings (IDR) and Support Ratings (SR) have been affirmed.
A full list of rating actions is at the end of this rating action commentary.
The revision of the Outlooks on YKB and its subsidiaries mirrors the rating actions on UniCredit S.p.A. (UC; BBB+/Negative/bbb+) on 24 March 2016 (see 'Fitch Revises UniCredit's Outlook to Negative; Affirms at 'BBB+'' at www.fitchratings.com).
KEY RATING DRIVERS
IDRS, NATIONAL RATINGS AND SUPPORT RATING
YKB's IDRs and Support Rating (SR) reflect Fitch's view that the bank is a strategically important subsidiary for UC, which is reflected in its Long-term IDRs being notched down once from that of UC. This view takes into account the continued high strategic importance of Turkey for UC.
UC owns, via UniCredit Bank Austria AG (UCBA; BBB+/Stable/bbb+), a 50% stake in YKB's holding company, which in turns holds an 82% stake in YKB.
Yapi Leasing's, Yapi Faktoring's and Yapi Kredi Invest's ratings are equalised with those of their owner, YKB. This reflects Fitch's view that these are core, highly integrated subsidiaries and that YKB would have a high propensity to provide support should it be required.
The ratings of the subsidiaries are driven by their close integration with YKB. All three companies share the parent's branding, key risk assessment systems and customers, and their respective board members are drawn from senior executives at YKB.
RATING SENSITIVITIES
IDRS, NATIONAL RATINGS AND SUPPORT RATING
The Negative Outlook on YKB's Long-term IDRs and National Rating reflects that on the parent. Therefore any negative rating action on UC's Long-term IDR would likely be mirrored by corresponding actions on the IDRs of all entities covered in this commentary. A revision of the Outlook on UC back to Stable would likewise probably result in the Outlooks on YKB and its subsidiaries being revised to Stable.
YKB's Long-term foreign currency IDR is at the same level as Turkey's Country Ceiling (BBB). Therefore, a downward revision of Turkey's Country Ceiling would also result in a downgrade of YKB's Long-term foreign currency IDR.
The ratings of Yapi Leasing, Yapi Factoring and Yapi Kredi Invest are sensitive to (i) changes in the ratings of YKB; and (ii) changes in Fitch's view of the propensity of YKB to provide support to its subsidiaries.
The rating actions are as follows:
Yapi ve Kredi Bankasi A.S.
Long-term foreign currency IDR affirmed at 'BBB'; Outlook revised to Negative from Stable
Short-term foreign currency IDR affirmed at 'F2'
Long-term local currency IDR affirmed at 'BBB'; Outlook revised to Negative from Stable
Short-term local currency IDR affirmed at 'F2'
National Long-term Rating affirmed at 'AAA(tur)'; Outlook revised to Negative from Stable
Support Rating affirmed at '2'
Senior unsecured debt affirmed at 'BBB'/'F2'
Subordinated notes affirmed at 'BBB-'
Viability Rating: unaffected
Yapi Kredi Finansal Kiralama A.O., Yapi Kredi Faktoring A.S., Yapi Kredi Yatirim Menkul Degerler A.S.
Long-term foreign currency IDR affirmed at 'BBB'; Outlook revised to Negative from Stable
Short-term foreign currency IDR affirmed at 'F2'
Long-term local currency IDR affirmed at 'BBB'; Outlook revised to Negative from Stable
Short-term local currency IDR affirmed at 'F2'
National Long-term Rating affirmed at 'AAA(tur)'; Outlook revised to Negative from Stable
Support Rating affirmed at '2'
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