Fitch rates Svenska Handelsbanken notes BBB

Fitch Ratings said it assigned a final rating of BBB to Svenska Handelsbanken AB’s issue of additional tier 1 notes.

The final rating is in line with the expected rating assigned to the notes Feb. 13, the agency said.

The notes will be CRD IV-compliant perpetual non-cumulative additional tier 1 instruments, Fitch said.

The rating is five notches below Handelsbanken’s viability rating of AA- in accordance with the agency’s criteria for assessing and rating bank subordinated and hybrid securities, the agency said.

The notching reflects the higher expected loss severity relative to senior unsecured creditors and higher non-performance risk, Fitch said.

The ratings also consider the bank’s solid capital buffers, strong profitability and high level of distributable reserves in the form of retained earnings, the agency said.

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