National Australia Bank Ltd.'s Capital Notes 3 Rated 'BB+'

SYDNEY (S&P Global Ratings) Feb. 11, 2019--S&P Global Ratings today said it has assigned its 'BB+' issue credit rating to National Australia Bank Ltd.'s (NAB; AA-/Negative/A-1+) proposed hybrid instruments, NAB Capital Notes 3 (NAB CN3). We rate NAB CN3 four notches below NAB's stand-alone credit profile (SACP) of 'a-'. The starting point of the SACP reflects our view that it is unlikely that the Australian government's support for NAB and other Australian banks--if needed--would extend to the hybrid capital instruments issued by the banks. To arrive at the rating on the NAB CN3 notes, we deduct four notches off NAB's SACP (a-), reflecting the following factors: We deduct one notch for the subordinated status of NAB CN3; Two notches for

...SYDNEY (S&P Global Ratings) Feb. 11, 2019--S&P Global Ratings today said it has assigned its '##+' issue credit rating to National Australia Bank Ltd.'s (NAB; ##-/Negative/A-1+) proposed hybrid instruments, NAB Capital Notes 3 (NAB CN3). We rate NAB CN3 four notches below NAB's stand-alone credit profile (SACP) of 'a-'. The starting point of the SACP reflects our view that it is unlikely that the Australian government's support for NAB and other Australian banks--if needed--would extend to the hybrid capital instruments issued by the banks. To arrive at the rating on the NAB CN3 notes, we deduct four notches off NAB's SACP (a-), reflecting the following factors: + We deduct one notch for the subordinated status of NAB CN3; + Two notches for the risk of partial or untimely payment; and + One notch for a nonviability contingent capital feature that would require NAB to convert all or a proportion of NAB-CN3 into ordinary shares or write them off if a nonviability trigger event occurs. In...

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