S&P rates Banco Fibra notes B+

Standard & Poor's said it assigned a B+ foreign-currency senior unsecured debt rating to Brazil-based Banco Fibra SA's $50 million notes to be issued under the bank's $250 million European medium-term note program. The issue matures in three years with semiannual payments.

S&P said the ratings on the bank incorporate its low profitability when compared with that of the industry, the challenge to build a diversified funding base given the natural concentration of its deposits, its exposure to the fierce competition affecting most banks operating in the segment of midsize companies and the consequent pressure on margins.

These risk factors are tempered by the bank's strong asset quality indicators, its good track record and expertise in the corporate and middle-market segments, strong liquidity to face economic downturns and cover unexpected losses and the benefits in terms of ownership with the implicit support from the shareholder, a large traditional conglomerate in Brazil owned by the Steinbruch family, the agency said.

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