Spain-Based Bankia's Proposed Additional Tier 1 Notes Rated 'B+'

MADRID (S&P Global Ratings) June 30, 2017--S&P Global Ratings said today that it has assigned its 'B+' long-term issue rating to the proposed perpetual additional Tier 1 (AT1) capital notes to be issued by Bankia S.A. (BBB-/Positive/A-3). We understand from the proposed AT1 notes' terms and conditions that the instrument will comply with the EU's latest capital requirements directive (CRD IV), which is the EU's implementation of Basel III. We also understand that the notes will rank senior to ordinary shares, but will be subordinated to more senior debt, including Bankia's Tier 2 debt. In accordance with our hybrid capital methodology ("Bank Hybrid Capital And Nondeferrable Subordinated Debt Methodology And Assumptions," published on Jan. 29, 2015, on RatingsDirect), we are

...MADRID (S&P Global Ratings) June 30, 2017--S&P Global Ratings said today that it has assigned its 'B+' long-term issue rating to the proposed perpetual additional Tier 1 (AT1) capital notes to be issued by Bankia S.A. (###-/Positive/A-3). We understand from the proposed AT1 notes' terms and conditions that the instrument will comply with the EU's latest capital requirements directive (CRD IV), which is the EU's implementation of Basel III. We also understand that the notes will rank senior to ordinary shares, but will be subordinated to more senior debt, including Bankia's Tier 2 debt. In accordance with our hybrid capital methodology ("Bank Hybrid Capital And Nondeferrable Subordinated Debt Methodology And Assumptions," published on Jan. 29, 2015, on RatingsDirect), we are assigning our 'B+' rating to the AT1 notes, four notches below our '###-' assessment of Bankia's stand-alone credit profile. We calculate this four-notch difference as follows: + One notch to reflect subordination risk....

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