Fitch: Macquarie Bank notes A-

Fitch Ratings said it assigned an expected rating of A- to Macquarie Bank Ltd.’s proposed dollar-denominated Basel-III compliant Tier 2 subordinated notes to be issued under the bank’s $20 billion 144A program.

The final amount of the notes, the interest rate and maturity are yet to be finalized, although early redemption of the notes is possible, Fitch said.

The notes include a non-viability clause and will qualify as regulatory tier 2 capital for the bank, the agency said.

The instrument is classified as subordinated debt and is rated one notch below the bank’s viability rating of A to reflect its below-average recovery prospects compared to senior unsecured instruments, Fitch said.

A material weakening of the capital or liquidity position could leave the bank susceptible to increased market volatility and likely result in a downgrade of its viability rating, the agency said.

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