Moody's assigns (P)B1(hyb) subordinated debt rating to Akbank TAS
Moody's Investors Service has assigned a provisional (P)B1(hyb) long-term foreign-currency subordinated debt rating to Turkey’s Akbank TAS's (Akbank—long term foreign currency deposit rating of Ba2 with a stable outlook, short term foreign currency deposit rating of NP and BCA of ba2) planned US dollar-denominated contractual non-viability Tier 2 bond issuance (the notes) under its global medium term note programme.
The provisional rating assigned to the subordinated debt obligations of Akbank is positioned two notches below the bank's adjusted baseline credit assessment (BCA) of ba2, in line with Moody's standard notching guidance for subordinated debt with loss triggered at the point of non-viability, on a contractual basis. The provisional rating does not incorporate any uplift from government support.
The assigned rating is notched from the adjusted BCA of Akbank and further movements will be contingent on the changes in this reference point.
The planned subordinated debt issuance is expected to be Basel III-compliant and eligible for Tier 2 capital treatment under Turkish law. The positioning of Akbank's provisional rating two notches below the bank's adjusted BCA reflects the potential for greater uncertainty associated with the timing of a principal write-down when compared to any ‘plain vanilla’ subordinated debt. In this respect, Moody's highlights that—as a way for the bank to avoid a bank-wide resolution—the notes may be forced to absorb losses ahead of ‘plain vanilla’ subordinated debt, if any.
Moody's issues provisional ratings in advance of the final sale of the securities. The ratings, however, only represent Moody's preliminary credit opinion. Upon conclusive review of all transaction and associated documents, Moody's will endeavour to assign definitive ratings to the notes. A definitive rating may differ from a provisional rating if the terms and conditions of the issuance are materially different from those of the preliminary prospectus reviewed.