Virgin Money Affirmed At 'BBB-/A-3' On Strategic Progress; Clydesdale Outlook Revised To Positive On Bail-In Buffer

Virgin Money UK PLC (Virgin Money; the non-operating holding company or NOHC) has made substantial progress in raising additional loss-absorbing capacity (ALAC) buffers, which provide protection to senior creditors in a resolution scenario. Continued issuance of bail-in instruments could create upward pressure on the rating of the operating company Clydesdale Bank PLC (Clydesdale) if the ALAC ratio were to sustainably exceed 8% of S&P Global Ratings' risk-weighted assets (RWAs), a scenario which looks increasingly possible in the next 12 months. We are therefore revising our outlook on Clydesdale to positive from stable, and affirming our 'BBB+/A-2' long- and short-term issuer credit ratings. We are also affirming our 'BBB-/A-3' long- and short-term issuer credit ratings on Virgin Money. The stable outlook

...January 17, 2020 - Virgin Money UK PLC (Virgin Money; the non-operating holding company or NOHC) has made substantial progress in raising additional loss-absorbing capacity (ALAC) buffers, which provide protection to senior creditors in a resolution scenario. - Continued issuance of bail-in instruments could create upward pressure on the rating of the operating company Clydesdale Bank PLC (Clydesdale) if the ALAC ratio were to sustainably exceed 8% of S&P Global Ratings' risk-weighted assets (RWAs), a scenario which looks increasingly possible in the next 12 months. - We are therefore revising our outlook on Clydesdale to positive from stable, and affirming our '###+/A-2' long- and short-term issuer credit ratings. - We are also affirming our '###-/A-3' long- and short-term issuer credit ratings on Virgin Money. - The stable outlook on Virgin Money balances the early progress in bank integration and strategic direction, as well as the latent execution risk in delivering sustainably higher...

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