Fitch Takes Actions on BBVA's Latin American Subsidiaries

  Fitch Takes Actions on BBVA's Latin American Subsidiaries

Business Wire

NEW YORK -- June 13, 2012

Fitch Ratings has taken various rating actions on the Latin America
subsidiaries of Banco Bilbao Vizcaya Argentaria (BBVA), following the June 11,
2012 downgrade of BBVA's Issuer Default Ratings (IDRs) and Viability Rating.
The rating actions on BBVA's Latin America subsidiaries differ across
companies and countries. A complete list of rating actions for each subsidiary
is included at the end of this release.

Fitch believes Latin America remains strategically important to BBVA. BBVA
benefits from the geographic diversification of its Latin American
subsidiaries, which allows them to generate earnings internationally and make
up for the muted results in Spain. The international subsidiaries are
self-funded, which boosts liquidity. It also minimizes contagion risk and
allows the companies to issue from different jurisdictions. Growth prospects
for emerging markets have recently been revised down, and the subsidiaries are
not entirely immune to global economic trends. However, earnings from emerging
markets will continue to contribute significantly to group earnings.

On June 11 2012, Fitch downgraded BBVA's long-term foreign currency IDR to
'BBB+' from 'A', and the Rating Outlook remained Negative. This followed a
three-notch downgrade of Spain's sovereign long-term IDR (see 'Fitch
Downgrades Spain to 'BBB'; Outlook Negative', dated 7 June 2012 at
'www.fitchratings.com').

The downgrade on BBVA reflects similar concerns to those that have affected
the Spanish sovereign rating; in particular, Spain is forecasted to remain in
recession through the remainder of this year and 2013 compared to the previous
expectation that the economy would benefit from a mild recovery in 2013. This
directly affects BBVA's activities in Spain. The Negative Outlook mirrors that
on the sovereign rating. BBVA's long-term IDRs and VRs are sensitive to a
further downgrade of Spain's sovereign rating (see 'Fitch Downgrades Santander
& BBVA to 'BBB+'/Negative Outlook on Sovereign Action', dated June 11, 2012 at
'www.fitchratings.com').

Some BBVA subsidiaries in Latin America currently exhibit an intrinsic
financial profile better or similar to that of its parent (measured by their
VRs). Therefore, their IDRs are no longer derived from the expected support
from the parent, although it's evident such subsidiaries remain a core asset
for BBVA. This is the case for Banco BBVA Bancomer in Mexico (BBVA Bancomer)
and BBVA Continental in Peru (BBVA Continental).

Considering the systemic importance of some of the subsidiaries in their home
markets, Fitch has assigned a Support Rating Floor (SRF) to several
subsidiaries. The Mexican and Peruvian sovereigns has vested interests in
preserving the health of their financial systems and hence will likely provide
support should it be required. However, at this time the VRs of all BBVA's
Latin America subsidiaries remain above their respective SRF as evidence of
their good financial profiles. Fitch's SRFs indicate a level below which the
agency will not lower the bank's long-term IDRs.

The rated subsidiaries of BBVA in Latin America shows robust financial
condition, strong local franchises, self-funded nature mostly within their
home markets, good profitability and capitalization. They do not rely on BBVA
in order to pursue their day to day business, and their management teams and
Board of directors enjoy a high degree of operating independence. Also, the
improved reputation, efficiency and monitoring of local regulators in
Colombia, Chile, Mexico, Panama and Peru provides sufficient ring-fencing to
protect the local subsidiaries from negative events occurring either at their
parent and/or their parent's sovereign. The exposure of BBVA's subsidiaries in
Latin America to their parent is negligible and tightly controlled by
stringent local regulations.

However, Fitch recognizes that the reputation of the parent and its
subsidiaries in Latin America are somewhat interdependent and correlated, and
so it's not possible to completely dissociate the ratings of the parent and
the subsidiaries. Further downgrades at the parent level or changes in market
perceptions regarding the Latin America subsidiaries could trigger further
reviews of the ratings, and this is the basis for many of the Negative
Outlooks detailed below. (For additional information, see Fitch's criteria
'Rating Foreign Banking Subsidiaries Higher than Parent Banks or Bank Holding
Companies, published June 12, 2012.)

Some of the subsidiaries' IDRs are still support-driven by its parent (Panama
and Colombia). Fitch has downgraded these subsidiaries, and their Outlook
remains Negative, reflecting the weakening of BBVA's ability to provide
support.

Given the current rating of the parent, Country Ceiling limitations are no
longer constraining any IDR.

Fitch has taken rating actions on the following BBVA subsidiaries:

Banco BBVA Bancomer (BBVA Bancomer):

BBVA Bancomer's IDRs and National Scale Ratings remain driven by its 'a-' VR.
They do not factor in any extraordinary support from its parent. BBVA
Bancomer's IDRs, National Ratings and VR reflect its strong franchise, risk
and revenue diversification, resilient margins throughout different phases of
the business cycle, ample and stable customer deposits, as well as its
reasonable asset quality metrics. They also consider lower than peers core
capital levels and a slightly higher, though still conservative, loan to
deposit ratio.

Fitch has revised the Outlook on BBVA Bancomer's international long-term IDR
to Negative from Stable. This reflects the inherent linkage of a subsidiary
and its parent, as BBVA Bancomer's VR and IDRs are currently one notch above
the rating of its parent. These ratings might not be affected if the parent
company is eventually downgraded one notch further. However, the Negative
Outlook reflects that these ratings could be affected by a downgrade of the
parent of two or more notches. Deterioration of the financial position of BBVA
Bancomer could also result in a downgrade of its VR and IDRs. Fitch has
downgraded the Support Rating (SR) to '2' from '1' and assigned a SRF of
'BBB-'. As the largest bank in its country, it is highly likely that the
Mexican government (FC and LC IDR 'BBB'; Outlook Stable) will provide support
should it should be required.

Fitch has affirmed BBVA Bancomer's global junior subordinated securities at
'BBB-' and affirmed the plain-vanilla subordinated hybrids were affirmed at
'BBB'. National Ratings assigned to the bank's hybrid securities, all of them
being junior subordinated debt instruments, were affirmed at 'AA(mex)'.
Potential downgrade of BBVA Bancomer's VR and IDRs would very likely result in
downgrades of similar magnitude in the hybrids ratings.

The Outlook on BBVA Bancomer's national-scale ratings is Stable, which
reflects that the ratings could only be affected by a multi-notch downgrade of
the bank's own VR. (This is not Fitch's baseline scenario, but it cannot be
ruled out.)

Casa de Bolsa BBVA Bancomer (BBVA Casa de Bolsa Mexico):

Fitch has affirmed BBVA Casa de Bolsa Mexico's National Ratings. The
securities firm forms an integral part of BBVA Bancomer's franchise. Fitch
makes no distinction between the credit risk of BBVA Casa de Bolsa Mexico and
BBVA Bancomer.

Facileasing S.A. de C.V. (Facileasing)

Fitch has affirmed the National Ratings of Facileasing in Mexico, which is
owned by BBVA. However, Fitch believes this entity is a strategic part of BBVA
Bancomer, and it should be viewed as part of BBVA's overall Mexican franchise.
Facileasing's National Ratings are equalized with those of BBVA Bancomer.

Banco BBVA Continental (BBVA Continental):

Fitch has downgraded BBVA Continental's long-term local currency IDR to 'BBB+'
from 'A-' and its short-term local currency IDR to 'F2' from 'F1'. Fitch has
also affirmed BBVA Continental's long-term foreign currency rating at 'BBB+'.
BBVA Continental's IDRs are now driven by its 'bbb+' VR, as is the IDR of its
parent. The Rating Outlook on BBVA Continental's long-term IDR remains
Negative in keeping with BBVA's Outlook, as complete isolation from the rating
trends of the parent is not likely.

Despite this link to its parent's ratings, the bank's VR evidences a capacity
to withstand some deterioration of its parent and remain above BBVA's rating,
absent a significant deterioration of market sentiment. BBVA Continental's VR
reflects the bank's sound franchise, high efficiency, adequate risk
management, robust asset quality, ample loan loss reserves, adequate capital,
wide based/ low cost funding, consistent performance and high profitability
within a very positive economic background despite fierce local competition.

BBVA Continental's Support Rating (SR) remains at 2, and Fitch has assigned a
'BBB-' SRF. As the second largest bank in Peru with a market share of more
than 20% of deposits, the Peruvian government (FC and LC IDR 'BBB' Stable
Outlook) is highly likely to provide support should it be required.

Continental Trustees (Cayman) Ltd (CTCL):

Fitch has downgraded the loan participation notes issued by CTCL to 'BB+' from
'BBB-'. The notes are secured by the rights to a junior subordinated loan
extended to BBVA Continental. The notes were downgraded, mirroring the trend
of its anchor rating (BBVA Continental's Local Currency long-term IDR).
According to Fitch's criteria to rate bank capital securities, this type of
securities would be notched 1-2 notches from the anchor rating indicated above
for probability of non-performance, in addition to 1-2 notches for loss
severity.

Continental Senior Trustees (Cayman) Ltd (CSTC):

Fitch has affirmed the rating of the loan participation notes issued by CSTC.
The notes are secured by the rights to a senior loan extended to BBVA
Continental, hence are equalized with the long-term Foreign Currency IDR of
BBVA Continental.

Continental Senior Trustees (Cayman) II Ltd (CSTCII):

Fitch has affirmed the rating of the loan participation notes issued by
CSTCII. The notes are secured by the rights to a senior loan extended to BBVA
Continental, hence are equalized with the long-term Foreign Currency IDR of
Banco Continental.

BBVA Colombia:

Fitch has downgraded BBVA Colombia's Local Currency IDR to 'BBB' from 'A-' and
its short-term IDR to 'F-2'. Fitch has also affirmed BBVA Colombia's long-term
Foreign Currency IDR and Foreign Currency IDR were at 'BBB' and 'F-2',
respectively. The Rating Outlook on its long-term IDRs is Negative. Fitch has
affirmed all of BBVA Colombia's other ratings. BBVA Colombia's IDRs are driven
by support from BBVA. The VR considers its resilient margins, improving
profitability and asset quality, adequate reserves, low loan concentration,
and relative efficiency, as well as its lower than average capital.

The Negative Outlook on BBVA Colombia's national-scale ratings reflects the
same trend of its international IDRs.

BBVA Chile and Forum:

Fitch's downgrade of both BBVA Chile's and Forum's long-term national-scale
ratings is the result of the lower support capacity of its parent. These
subsidiaries remain strategic for BBVA's franchise in Chile and are recurring,
albeit smaller, contributors to the parent's overall profitability. The Rating
Outlook for BBVA Chile, was revised to Stable from Negative given the
increased possibility of government support it should be required; although,
the current financial condition of the bank in Chile remains sound. The
Outlook for the long-term national ratings for Forum remains Negative, in line
with that assigned to the Outlook for BBVA's long-term IDR, signaling that
further downgrades on BBVA may affect the National Ratings of its subsidiary
in Chile; Fitch does not expect government support may be provided to non-bank
financial intuitions.

BBVA Panama:

As BBVA Panama's National Ratings remain driven by support from BBVA, Fitch
has downgraded its long-term National Scale Rating to 'AA+(pan)' from
'AAA(pan)' and affirmed its short-term national scale rating at 'F1+(pan)'.
The Rating Outlook was revised to Negative to align it with BBVA's Outlook.
Despite its smaller size compared to other BBVA subsidiaries in the region,
BBVA Panama is considered to be strategic for BBVA's Latin American franchise
as indicated by this operations long track record in Panama.

Fitch has taken the following rating actions:

BBVA Bancomer

--Foreign currency long-term IDR affirmed at 'A-'; Outlook revised to Negative
from Stable;

--Local currency long-term IDR affirmed at 'A-'; Outlook revised to Negative
from Stable;

--Foreign and local currency short-term IDRs affirmed at 'F1'

--Viability Rating affirmed at 'a-';

--Support rating downgraded to '2' from '1';

--Support Rating Floor assigned at 'BBB-';

--Long-term national rating affirmed at 'AAA(mex)'; Outlook Stable;

--Short-term national rating affirmed at 'F1+(mex)';

--Long-term senior unsecured global notes affirmed at 'A-';

--Long-term plain vanilla subordinated notes affirmed at 'BBB';

--Long-term junior subordinated notes affirmed at 'BBB-';

--Long-term national-scale rating for local senior unsecured debt issues
affirmed at 'AAA(mex)';

--Long-term national-scale rating for local issues of market linked securities
affirmed at 'AAA(emr)(mex)';

--Long-term national-scale rating for local subordinated debt issues affirmed
at 'AA(mex)'.

Casa de Bolsa BBVA Bancomer

--Long-term national rating affirmed at 'AAA(mex)'; Outlook Stable;

--Short-term national rating affirmed at 'F1+(mex)'.

Facileasing, S.A. de C.V.

--Long-term national rating affirmed at 'AAA(mex)'; Outlook Stable;

--Short-term national rating affirmed at 'F1+(mex)';

--Short-term senior unsecured debt affirmed at 'F1+(mex)';

--Long-term senior unsecured debt affirmed at 'AAA(mex)'.

BBVA Continental

--Long-term foreign currency IDR affirmed at 'BBB+'; Outlook revised to
Negative from Stable;

--Long-term local currency IDR downgraded to 'BBB+' from 'A-'; Outlook
Negative;

--Short-term foreign currency IDR affirmed at 'F2';

--Short-term local currency IDR downgraded to 'F2' from 'F1';

--Support rating affirmed at '2';

--Support Rating Floor assigned at 'BBB-';

--Viability rating affirmed at 'bbb+'.

Continental Trustees (Cayman) Ltd.

--Senior secured junior subordinated loan participation notes downgraded to
'BB+' from 'BBB-'.

Continental Senior Trustees (Cayman) Ltd

--Senior secured loan participation notes affirmed at 'BBB+'.

Continental Senior Trustees II (Cayman) Ltd.

--Senior secured loan participation notes affirmed at 'BBB+'.

BBVA Colombia

--Long-term foreign currency IDR affirmed at 'BBB'; Outlook revised to
Negative from Stable;

--Short-term foreign currency IDR affirmed at 'F2';

--Long-term Local currency IDR downgraded to 'BBB' from 'A-'; Outlook
Negative;

--Short-term Local currency IDR downgraded to 'F2' from 'F1';

--Viability Rating affirmed at 'bbb-';

--Support rating affirmed at '2';

--National long-term rating affirmed at 'AAA(col)'; Outlook revised to
Negative from Stable;

--National senior unsecured debt affirmed at 'AAA(col)';

--National Short-term rating affirmed at 'F1+(col)'.

--National long-term subordinated debt affirmed at 'AAA(col)'.

BBVA Chile

--Long-term national-scale rating downgraded to 'AA-(cl)' from 'AA+(cl)';
Outlook revised to Stable from Negative;

--Short-term national-scale affirmed at 'N1+(cl)';

--National long-term rating on senior unsecured bonds downgraded to 'AA-(cl)'
from 'AA+(cl);

--National long-term rating on mortgage notes downgraded to 'AA-(cl)' from
'AA+(cl);

--National long-term rating on subordinated bonds downgraded to 'A (cl) from
'AA-(cl)';

--National equity rating affirmed at 'Primera Clase nivel 3'.

Forum Servicios Financieros

--Long-term national-scale rating downgraded to 'AA-(cl)' from 'AA(cl)';
Outlook Negative;

--National long-term rating on senior unsecured bonds downgraded to 'AA-(cl)'
from 'AA(cl);

--National short-term rating on commercial paper affirmed at 'F1+(cl)'.

BBVA Panama

--Long-term national-scale rating downgraded to 'AA+(pan)' from 'AAA(pan)';
Outlook revised to Negative from Stable;

--Short-term national-scale rating affirmed at 'F1+(pan)';

--Long-term senior unsecured debt downgraded to 'AA+(pan) from 'AAA(pan)'.

Additional information is available at 'www.fitchratings.com'. The ratings
above were solicited by, or on behalf of, the issuer, and therefore, Fitch has
been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Global Financial Institutions Rating Criteria' (Aug. 16, 2011);

--'National Ratings Criteria' (Jan. 19, 2011);

--'Treatment of Hybrids in Bank Capital Analysis' (July 11, 2011);

--'Rating Bank Regulatory Capital and Similar Securities' (Dec. 15, 2011);

--'Rating Foreign Banking Subsidiaries Higher than Parent Banks and Parent
Bank Holding Companies' (June 12, 2012).

Applicable Criteria and Related Research:

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=649171

National Ratings Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=595885

Treatment of Hybrids in Bank Capital Analysis

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=641269

Rating Bank Regulatory Capital and Similar Securities

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=656371

Rating Foreign Banking Subsidiaries Higher Than Parent Banks or Bank Holding
Companies

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=681270

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS.
PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK:
HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING
DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S
PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND
METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF
CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL,
COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM
THE 'CODE OF CONDUCT' SECTION OF THIS SITE.

Contact:

Fitch Ratings
Elizabeth Fogerty, +1-212-908-0526
Media Relations, New York
elizabeth.fogerty@fitchratings.com
or
Primary Analyst (BBVA Bancomer and Casa de Bolsa Bancomer)
Alejandro Garcia, CFA, +52 81 8399 9146
Senior Director
Fitch Mexico SA de CV
Prol. Alfonso Reyes 2612, Edificio Connexity Piso 8
Col. Del Paseo Residencial
64920 Monterrey, N.L., Mexico
or
Primary Analyst (BBVA Continental; BBVA Colombia and Continental Trustees):
Diego Alcazar, +1-212-908-0396
Director
Fitch, Inc.
One State Street Plaza
New York, NY 10004
or
Primary Analyst (BBVA Chile and Forum Servicios Financieros):
Roberto Pratt, +562 499 3320
Director
Fitch Chile Clasificadora de Riesgo Limitada
Alcantara 200, Las Condes
Santiago, Chile
or
Primary Analyst (Facileasing, S.A. de C.V.):
Veronica Chau, +52 81 8399 9170
Associate Director
or
Primary Analyst (BBVA Panama):
Carmen Matamoros, +503 2516-6612
Associate Director
Edificio Plaza Cristal, Tercer Nivel. 79 Ave. Sur y Calle Cuscatlan, Col.
Escalon.
San Salvador, El Salvador
or
Secondary Analyst (BBVA Bancomer and Casa de Bolsa Bancomer):
Monica Ibarra, +52 81 8399 9150
Director
or
Secondary Analyst (BBVA Continental and Continental Trustees):
Santiago Gallo, +54-11-5235-8137
Director
or
Secondary Analyst (BBVA Colombia):
Andres Marques, +571 326 9999
Director
or
Secondary Analyst (BBVA Chile and Forum Servicios Financieros):
Eduardo Santibanez, +56-2-499-33-07
Director
or
Secondary Analyst (Facileasing, S.A. de C.V.):
Alejandro Garcia, CFA, +52 81 8399 9146
Senior Director
or
Secondary Analyst (BBVA Panama):
Mario Hernandez, +503 2516-6614
Associate Director
or
Committee Chairperson
Peter Shaw, +1-212-908-0553
Managing Director