Santander UK PLC Outlook Revised To Stable; 'A/A-1' Ratings Affirmed; Three Hybrids Upgraded

Since its creation a year ago, Santander UK Group Holdings PLC has issued meaningful amounts of additional tier 1, tier 2, and--more recently--senior unsecured debt. We therefore see only a remote possibility that the additional loss-absorbing capacity (ALAC) buffer of its subsidiary, Santander UK, will fall short of our projection of at least 8%, in the next 12-18 months. We are therefore revising our outlook on Santander UK to stable from negative and affirming the 'A/A-1' long- and short-term counterparty credit ratings. We continue to include two notches of ALAC uplift in the long-term rating. The stable outlook on Santander UK reflects our expectation that it will see continued gradual strengthening of capitalization over the next two years and continued

...+ Since its creation a year ago, Santander UK Group Holdings PLC has issued meaningful amounts of additional tier 1, tier 2, and--more recently--senior unsecured debt. + We therefore see only a remote possibility that the additional loss-absorbing capacity (ALAC) buffer of its subsidiary, Santander UK, will fall short of our projection of at least 8%, in the next 12-18 months. + We are therefore revising our outlook on Santander UK to stable from negative and affirming the 'A/A-1' long- and short-term counterparty credit ratings. We continue to include two notches of ALAC uplift in the long-term rating. + The stable outlook on Santander UK reflects our expectation that it will see continued gradual strengthening of capitalization over the next two years and continued issuance of a meaningful amount of senior debt at the holding company level. + We have raised by one notch to '##' our ratings on three legacy deferrable hybrid instruments, reflecting our view of a lower risk of coupon deferral....

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