Fitch rates ProCredit bonds BB-

Fitch Ratings said it assigned ProCredit Holding AG's (PCH) upcoming issue of euro-denominated subordinated notes an expected BB- long-term rating. The agency estimates the offering will be €100 million - €125 million in size with a 2034 maturity and qualify as tier 2 regulatory capital. All other issuer and debt ratings are unaffected.

“The subordinated notes' expected rating is one notch below PCH's viability rating (VR) of bb. The VR, which reflects our assessment of the entity's stand-alone strength, is used as the anchor rating for this instrument as it best indicates the risk of the issuer becoming non-viable and reflects our view that extraordinary support from PCH's international financial institutions (IFIs) shareholder (which drives its long-term issuer default rating of BBB) is less likely to fully extend to non-senior obligations.

“However, the expected rating is notched down once for loss severity, rather than our baseline two notches, from the VR to reflect our view that a large or full loss is likely to be mitigated by institutional support,” Fitch explained in a press release.

PCH is expected to use the proceeds for uses described in its green bond framework, including green project financing.

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