Fitch Expects to Rate Banco Santander Mexico's Senior Notes 'BBB+'

  Fitch Expects to Rate Banco Santander Mexico's Senior Notes 'BBB+'

Business Wire

MONTERREY, Mexico & NEW YORK -- November 06, 2012

Fitch Ratings expects to assign a 'BBB+' rating to the planned issuance of
Banco Santander Mexico (SAN Mexico)'s dollar-denominated fixed rate senior
unsecured notes. The amount of these notes could be up to USD 1.0 billion,
with a tenor for up to 10 years.

The 'BBB+' expected rating of these senior notes is aligned to SAN Mexico's
'BBB+' long-term Issuer Default Ratings (IDRs), which reflects that these
notes rank pari passu with other senior obligations. In turn, SAN Mexico's
IDRs are aligned to its viability rating (VR) of 'bbb+', indicating that its
credit quality is driven by the bank's intrinsic financial profile.

SAN Mexico's VR of 'bbb+' and its long term IDRs of 'BBB+' are driven by the
bank's relevant and growing franchise, strong risk management, sound capital
ratios and improving profitability, although they also consider SAN Mexico's
lower than peers margins and the challenges arising from above average loan
growth recently.

The Rating Outlook on SAN Mexico's IDR remains Negative, highlighting the
inherent linkage of a subsidiary and its parent. The Negative Outlook reflects
that SAN Mexico's VR and IDR could be affected by further potential downgrades
of its parent, Spain's Banco Santander (SAN, rated 'BBB+' with a Negative
Outlook by Fitch).

In Fitch's opinion, SAN Mexico has the financial strength to merit a rating
above its parent, absent a significant deterioration of market sentiment, but
only to certain degree. Therefore, a potential multi-notch downgrade of SAN,
could affect SAN Mexico's VR, its IDRs, and the rating of the proposed senior
notes.

Considering the systemic importance of SAN Mexico, Fitch maintains a Support
Rating Floor (SRF) of 'BBB-', given the vested interest from the Mexican
sovereign to preserve the health of its financial system. In Fitch's view, the
sovereign could provide support, should it be required. Fitch's SRFs indicate
a level below which the agency will not lower the bank's long-term IDRs. The
proposed senior notes are not explicitly guaranteed by the Mexican savings
protection agency.

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. 15, 2012);

--'Rating FI Subsidiaries and Holding Companies' (Aug. 10, 2012).

Applicable Criteria and Related Research:

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686181

Rating FI Subsidiaries and Holding Companies

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679209

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
Primary Analyst
Alejandro Garcia, CFA, +52 81 8399 9146
Senior Director
Fitch Mexico S.A. de C.V.
Prol. Alfonso Reyes 2612, Edificio Connexity Piso 8
Col. Del Paseo Residencial C.P. 64920
Monterrey, Mexico
or
Secondary Analyst
Monica Ibarra, +52 81 8399 9150
Director
or
Committee Chairperson
Franklin Santarelli, +1 212-908-0739
Managing Director
or
Media Relations:
Elizabeth Fogerty, +1 212-908-0526
Email: elizabeth.fogerty@fitchratings.com
 
Press spacebar to pause and continue. Press esc to stop.