National Australia Bank Ltd.'s Hybrid Securities Rated 'BBB-'

MELBOURNE (S&P Global Ratings) May 31, 2016--S&P Global Ratings today said it has assigned its 'BBB-' issue credit rating to National Australia Bank Ltd.'s (NAB; AA-/Stable/A-1+) proposed hybrid securities, NAB Capital Notes 2 (NAB-CN2). S&P Global Ratings rates NAB-CN2 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 and their subsidiaries. To arrive at the rating on the NAB-CN2 notes, we deduct four notches from NAB's SACP, reflecting the following factors: We deduct one notch for the subordinated status of NAB-CN2; Two notches for

...MELBOURNE (S&P Global Ratings) May 31, 2016--S&P Global Ratings today said it has assigned its '###-' issue credit rating to National Australia Bank Ltd.'s (NAB; ##-/Stable/A-1+) proposed hybrid securities, NAB Capital Notes 2 (NAB-CN2). S&P Global Ratings rates NAB-CN2 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 and their subsidiaries. To arrive at the rating on the NAB-CN2 notes, we deduct four notches from NAB's SACP, reflecting the following factors: + We deduct one notch for the subordinated status of NAB-CN2; + 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-CN2 into ordinary shares or write them off if a nonviability...

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