S&P shifts De Sabadell view to positive

S&P said it changed its outlook for Banco De Sabadell to positive from stable and affirmed the BBB- issuer and senior unsecured ratings, citing its increased additional loss-absorbing capacity buffers

“Sabadell is strengthening its cushion of subordinated bail-in-able debt. Since the beginning of 2022, Sabadell has continued building its buffer of subordinated bail-in-able debt, issuing about €900 million of senior nonpreferred debt. Consequently, its ALAC ratio has increased to about 3.6% of S&P Global Ratings' risk weighted assets (RWA) as of June 2022, up from 3% at year-end 2021. Equally, Sabadell already meets–by a thin margin–its 2024 minimum requirement for own funds and eligible liabilities (MREL),” the agency said in a press release.

The brighter outlook reflects the potential for an upgrade over the next 12-24 months if Sabadell delivers on its issuance plan, boosts its subordinated bail-in-able buffer, and delivers a clear line of sight that its ALAC buffer will remain sustainably above 350 basis points, S&P said.

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