Fitch assigns ‘A+’ rating to DBS’ preference shares
Fitch Ratings has assigned a Long-term rating of ‘A+’ to Singapore-based DBS Bank Ltd’s (DBS) proposed issue of Singapore dollar non-cumulative non-convertible non-voting Guaranteed Preference Shares, callable with step-up in 2018 (Preference Shares).
The rating on the issue is one notch below DBS’ Long-term foreign currency Issuer Default Rating (IDR) of ‘AA-’ (AA minus), and is in accordance with Fitch’s criteria of rating hybrid securities and preference shares of financial institutions.
While the issuing entity is a wholly-owned SPV based in the Cayman Islands, Fitch notes that the entire issue is guaranteed on a subordinated basis by DBS and will rank pari passu with all other preference shares and other Tier 1 capital securities of DBS. The SPV will channel the net proceeds to DBS to strengthen the bank’s capital base and to support growth. The Preference Shares are intended to qualify for Innovative Tier-1 Capital as per the Monetary Authority of Singapore (MAS) guidelines.
– www.theasianbanker.com (May 16 2008)–