Fitch Ratings has assigned
The notes are issued under OCBC's
Key Rating Drivers
These Additional Tier 1 (AT1) capital securities are rated four notches below OCBC's 'aa-' Viability Rating, comprising two notches for loss severity and two notches for non-performance risk, according to Fitch's Bank Rating Criteria and in line with other Fitch-rated AT1 securities issued by OCBC.
The loss severity is high in light of the securities' deep subordination. In the event of any winding-up proceeding, holders of these securities and all other AT1 securities of OCBC will rank ahead of claims of only OCBC's ordinary shareholders, and will rank below the bank's senior creditors, including covered bondholders, depositors and holders of the bank's Tier 2 capital securities, in priority of claims.
The securities are also subject to write-off at a point of non-viability as determined by the
Non-performance risk arises from the unrestricted discretion that OCBC and MAS have in cancelling any periodic distribution on the proposed securities.
OCBC will also not be obliged to make any distribution if it is prevented from doing so under
Rating Sensitivities
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
A change in OCBC's Viability Rating will affect the rating on the proposed securities, as it is the anchor rating from which the securities are notched down.
Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
The rating on the proposed securities will be upgraded if OCBC's Viability Rating is upgraded. However, positive rating momentum is limited as the rating is already near the top of Fitch's global bank rating universe.
Date of Relevant Committee
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit https://www.fitchratings.com/topics/esg/products#esg-relevance-scores.
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