We consider that Bankia S.A.'s creditworthiness continues to benefit from its solid domestic franchise, enhanced risk management, and adequate risks-adjusted capital ratio. Although the likelihood of a merger with Banco Mare Nostrum S.A. (not rated) is increasing, the structure and the financial terms of the deal are still to be agreed upon. We are affirming the 'BBB-/A-3' long- and short-term ratings on Bankia and the 'BB+/B' ratings on its parent company BFA Tenedora de Acciones S.A.U. The outlook on both entities remains positive, reflecting the possibility of an upgrade on the back of a potentially more supportive economic and operating environment in Spain. On March 24, 2017, S&P Global Ratings affirmed its 'BBB-/A-3' long- and short-term counterparty credit ratings on
