Fitch Expects to Rate Banco Santander Chile's 6 Year CHF100-150MM Senior Fixed Rate Notes 'A+(exp)'

  Fitch Expects to Rate Banco Santander Chile's 6 Year CHF100-150MM Senior
  Fixed Rate Notes 'A+(exp)'

Business Wire

BUENOS AIRES, Argentina & SANTIAGO, Chile -- September 5, 2013

Fitch Ratings expects to assign a long-term foreign currency rating of
'A+(exp)' to Banco Santander Chile's (BSC) six year CHF100-150 million senior
unsecured fixed rate notes.

KEY RATING DRIVERS

The rating assigned to BSC's new debt issuance correspond to the bank's
long-term Issuer Default Rating (IDR) and ranks equal to other senior
unsecured debt.

BSC's IDRs and national scale ratings remain driven by its 'a+' Viability
Rating (VR) and they do not factor in any support from its parent, although it
remains a strategically important subsidiary for Santander. BSC's IDRs,
national ratings and VR reflect its market-leadership position and its strong
franchise within Chile, whose economy continues to perform well. The ratings
also reflect the bank's healthy asset quality, strong underlying
profitability, albeit pressured since 2012, adequate funding and capital
position, and independent management. BSC's liquidity benefits from a
sizeable, historically stable, and well-diversified retail deposit base. In
addition, BSC has significantly reduced refinancing risk and exposure to more
price-sensitive institutional deposits by growing core deposits and building a
liquidity cushion while maintaining access to capital markets without any
apparent rise in funding costs. BSC's stand-alone capital is adequate for its
rating category and its liquidity position is strong, while its exposure to
the Santander group is negligible and constrained by stringent local
regulations.

RATING SENSITIVITIES

The rating of Banco Santander Chile CHF 100 - 150 million Senior Fixed Rate
Notes due 2019 would be downgraded should the bank's IDR be downgraded. BSC's
long-term IDR and national long-term rating have a Negative Outlook mirroring
that on Santander's ratings. A downgrade in Santander's ratings will likely
lead to a downgrade of BSC's VR and IDR. This reflects the inherent linkage of
a subsidiary and its parent, as BSC's IDR is currently three notches above the
rating of its parent, which is the maximum Fitch considers prudent according
to its rating criteria. In spite of its intrinsic strength, BSC's VR could
potentially be dragged down by a further deterioration of Santander,
particularly in its access to or cost of funding, although this has not been
the case so far.

Downward pressure on BSC's VR could also arise from a sustained pressure on
profitability stemming from further rise in loan loss provisions (LLPs) or
from markedly lower liquidity or capitalization. In Fitch's view, there is
limited upside potential in the near future for BSC's VR.

Fitch currently rates BSC as follows:

--Foreign and local currency long-term IDRs 'A+'; Outlook Negative;

--Foreign and local currency short-term IDRs 'F1';

--Viability rating 'a+';

--Support rating '1';

--Support rating floor 'A-';

--Long-term national rating 'AAA(cl)'; Outlook Negative;

--Short-term national rating 'N1+(cl)';

--Senior unsecured bonds 'A+' and national long-term rating 'AAA(cl)';

--USD5 billion U.S. commercial paper programme 'F1';

--Subordinated bonds national long-term rating 'AA(cl)';

--National equity rating 'Primera Clase nivel 1'.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Financial Institutions Rating Criteria' (Aug. 15, 2012);

--'Fitch Affirms Santander's Latin American Subsidiaries' (May 28, 2013);

--'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

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=801361

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Contact:

Fitch Ratings
Primary Analyst
Santiago Gallo, +54-11-5235-8137
Director
Fitch Argentina Calificadora de Riesgo S.A.
Sarmiento 663 - piso 7 - C1041AAM
Buenos Aires, Argentina
or
Secondary Analyst
Eduardo Santibanez, +56-2-499-33-07
Senior Director
or
Media Relations:
Elizabeth Fogerty, New York, +1-212-908 0526
elizabeth.fogerty@fitchratings.com