Moody’s rates Daycoval notes Ba2/Aa2.br

Moody's America Latina said it assigned a Ba2 global local currency debt rating and an Aa2.br national scale debt rating to the new two-year local currency senior unsecured banknotes (letras financeiras) to be issued by Banco Daycoval SA.

The proposed banknotes will be due November 2018, for a total between R$200.1 million and R$400.05 million.

The outlook is negative, in line with the outlook on the bank's global scale deposit rating.

Moody’s said the rating reflects Daycoval's consistent earnings generation capacity supported by a disciplined risk profile and low leverage ratios, factors that compare well to other Brazilian midsized banks specializing in commercial lending.

Asset quality remains adequate despite the deterioration of the bank's 90-day problem loan ratio, which doubled to 1.8% of total loans in June 2016, compared to same period in 2015, as the corporate borrowers continue to face earnings and liquidity pressures due to Brazil's challenging operating environment, the agency added.

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