Fitch assigns Mizuho notes A-

Fitch Ratings said it rated Mizuho Financial Group, Inc.'s €1.5 billion of five-year and 10-year senior unsecured note A-.

“The note rating is aligned with Mizuho's long-term issuer default rating (IDR), despite its structural subordination features. We align Mizuho's holding-company senior debt ratings and IDRs with the IDRs of its operating companies. This reflects our view of consolidated supervision and that the holding company's failure and senior-level default risk is similar to that of wholly owned operating banks, with all entities being eligible for pre-emptive state support,” the agency said in a press release.

Mizuho's will count the notes towards its total loss-absorbing capacity requirements, as they will be structurally subordinated to the liabilities of its subsidiaries.

Fitch noted Mizuho met the 16% minimum total external TLAC capital ratio requirement at the of end-December, which excludes buffers for global systemically important banks, capital conservation and countercyclical capital.

“We estimate Mizuho had capital buffers to meet the 18% minimum requirement for end-March 2022 under the final Basel rules before this issuance,” Fitch said.

Mizuho will downstream the net proceeds of the note to Mizuho Bank, Ltd. as a senior unsecured obligation to qualify as internal TLAC under Japan's TLAC standard for the subsidiary.

The outlook is stable.

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