Global Credit Research – 03 Jun 2015

Actions follow conclusion of methodology-related review and revision of government support considerations
New York, June 03, 2015 — Moody’s Investors Service has concluded its rating reviews on Banco de Costa Rica (BCR), Banco Nacional de Costa Rica (BNCR), Panama’s Banco Internacional de Costa Rica (BICSA), Guatemala’s Banco Industrial (Industrial) and Banco de Reservas de la Republica Dominicana (Banreservas). These reviews were initiated on 17 March 2015 (see press release at https://www.moodys.com/research/Moodys-reviews-global-bank-ratings–
PR_321005), following the publication of Moody’s new bank rating methodology.

The rating agency lowered the baseline credit assessments (BCA) and adjusted BCAs of BCR, BNCR and Industrial. In addition, it lowered the adjusted BCAs of Banreservas and BICSA.

Further, Moody’s has downgraded the following ratings:

– Industrial’s long and short term local currency deposit ratings and foreign currency junior subordinate debt rating

– Industrial Senior Trust’s foreign currency senior debt rating and Industrial Subordinated Trust’s foreign currency subordinated debt rating

– BICSA’s long-term foreign currency deposit rating

The banks’ other ratings have been affirmed.

The rating agency has also lowered Guatemala’s Macro Profile to Weak from Weak+, in line with the outlook change to negative on the country’s Ba1 government bond rating, on 26 May 2015.

In addition, Moody’s has affirmed with a stable outlook the ratings of Guatemala’s Banco de los Trabajadores (Bantrab) and those of Panama-based Global Bank Corporation and Subsidiaries (Global Bank), and Banco Latinoamericano de Comercio Exterior (Bladex).

In general, the rating changes do not reflect either an improvement or a deterioration in the affected issuers’ credit fundamentals. Rather, the changes are a consequence of the implementation of Moody’s new bank methodology, published on 16 March 2015 (see “Banks,” http://www.moodys.com/viewresearchdoc.aspx?docid=PR_320662). The new methodology highlighted these issuers as being either positive or negative outliers at their previous rating levels. Moody’s considers these issuers to be more appropriately positioned at their current revised rating levels.

Moody’s has also assigned Counterparty Risk (CR) assessments to all of these eight banks, in line with its new bank rating methodology.

Moody’s has withdrawn the outlooks on the foreign currency junior subordinate debt rating of Banco Industrial as well as on the foreign currency subordinate debt ratings of Industrial Subordinated Trust, Bantrab Capital Notes Trust, and Banreservas, for its own business reasons. Please refer to Moody’s Investors Service’s Policy for Withdrawal of Credit Ratings, available on its website, www.moodys.com. Outlooks, which provide an opinion on the likely rating direction over the medium term, are now assigned only to long-term deposit and senior unsecured debt ratings. Except for Industrial and Industrial Senior Trust, the long-term deposit and senior debt of which have a negative outlook, the outlook on the other affected banks’ debt and deposit ratings is stable.

RATINGS RATIONALE

The new bank rating methodology includes a number of elements that Moody’s has developed to help accurately predict bank failures and determine how each creditor class is likely to be treated when a bank fails and enters resolution. These new elements capture insights gained from the crisis and the fundamental shift in the banking industry and its regulation.

In light of the new methodology, Moody’s rating actions generally reflect the following considerations: (1) the macro profiles of each of the countries where the banks operate; (2) the banks’ core financial ratios; and (3) the likelihood of affiliate and government support for these institutions.

— BANCO DE COSTA RICA AND BANCO NACIONAL DE COSTA RICA’S BCA LOWERED; DEPOSIT AND DEBT RATINGS AFFIRMED

Moody’s lowered the BCA and adjusted BCAs of BCR and BNCR to ba2 from ba1. These changes primarily considered the banks’ adjusted capitalization levels, which compare unfavorably with global peers, notwithstanding reported capital ratios that are somewhat stronger and that provide adequate cushions relative to the minimum regulatory requirements in Costa Rica. Moody’s ratio of Tangible Common Equity to Risk-Weighted Assets is designed to provide a globally consistent measure of capitalization and thereby enhance the comparability of banks operating under different regulatory regimes. Moody’s ratio, which has an important weight in the new methodology, closely mirrors Basel III guidelines and is stricter in many respects than the current Costa Rican standard.

The lower BCA also takes into account the banks’ weak profitability owing to high operating costs and mandatory transfers to government-related entities. Asset quality remains sound, though pressures may arise from Costa Rica’s current economic slowdown and rising unemployment, as well as the significant amount of foreign currency lending to local currency earners, in the event of a depreciation in the Colon. However, BCR and BNCR both benefit from an explicit government guarantee of their obligations per Article 4 of the Banking Law, including deposits, which has provided them with superior access to retail funding. In addition, both maintain ample liquid resources. The ratings also consider Costa Rica’s Moderate (-) Macro Profile, which reflects the relatively diversified economy, adequate if slowing GDP growth, and strong institutions that provide a high degree of policy predictability.

The affirmation with a stable outlook of both banks’ Ba1/Not Prime local currency deposit ratings and their Ba1 foreign currency senior debt ratings are based on the government guarantee. The banks’ Ba2/Not Prime foreign currency deposit ratings, which are constrained by Costa Rica’s sovereign ceiling for foreign currency deposits, were also affirmed with a stable outlook, in line with the stable outlook on Costa Rica’s government bond rating. In addition, Moody’s assigned Ba1(cr)/Not Prime(cr) CR assessments to Banco de Costa Rica and Banco Nacional de Costa Rica.

Given the government guarantee and the foreign currency deposit ceiling constraint, the banks’ deposit and debt ratings would be sensitive only to rating actions on Costa Rica’s sovereign rating. Further changes in the banks’ BCAs will not impact on their ratings.

— BICSA’S ADJUSTED BCA AND DEPOSIT RATING DOWNGRADED

Moody’s lowered BICSA’s adjusted BCA to ba2 from ba1, the same level as the bank’s BCA, which was affirmed. As a result of the lower adjusted BCA, BICSA’s foreign currency deposit rating was downgraded to Ba2/Not Prime from Ba1/Not Prime, with a stable outlook. The action reflects a change of the rating anchor Moody’s uses to assess affiliate support to the Ba2 foreign currency deposit rating of BCR, BICSA’s controlling parent, from BCR’s Ba1 local currency deposit rating. Moody’s has hence aligned BCR’s ability to provide support to BICSA in foreign currency in Panama to BCR’s capacity to cover its own foreign currency deposit obligations in its home market of Costa Rica. Moody’s continues to believe there is a high likelihood that BCR will provide support to BICSA if necessary.

BICSA’s ba2 BCA considers the bank’s healthy core capitalization and well managed liquidity. While delinquencies remain low, the bank faces growing asset quality risk in light of the deceleration of the economies of Costa Rica and Panama, which constitute about two-thirds of BICSA’s loan book, as well as the bank’s rising exposure to a number of weakening South American economies. Credit challenges also include a heavy reliance on US dollar wholesale funding, which exposes the bank to repricing and refinancing risks in light of the expected normalization of monetary policy in the US. In addition, BICSA’s profitability remains pressured owing to intensifying competition.

BICSA’s deposit rating does not benefit from government support, Panama being a legally dollarized economy without a true lender of last resort. Moody’s assigned Ba1(cr) and Not Prime(cr) CR assessments to BICSA.

BICSA’s stable outlook reflects the stable outlook on its controlling parent, BCR. BICSA’s foreign currency deposit rating would be sensitive to a further change in its parent’s rating.

— BANCO INDUSTRIAL’S BCA AS WELL AS ITS DEPOSIT AND DEBT RATINGS DOWNGRADED

Moody’s lowered Banco Industrial’s BCA and adjusted BCA to ba3 from ba1. The downgrade primarily captures Industrial’s adjusted capitalization levels, which as with those of the Costa Rican banks compare unfavorably with global peers, even though reported capital ratios are somewhat stronger and provide adequate cushions relative to the minimum regulatory requirements in Guatemala. Moody’s Tangible Common Equity to Risk-Weighted Assets ratio, which has an important weight in the new methodology, closely mirrors Basel III guidelines and is stricter in many respects than the current Guatemalan standard. The weak capital is due to the bank’s high loan growth and hefty dividend payments, although the latter have been in part offset by intermittent capital injections.

The lower BCA also reflects the change in Guatemala’s Macro Profile to “Weak” from “Weak+,” following the change in outlook on Guatemala’s Ba1 government bond rating to negative from stable on 26 May 2015. The macro profile reflects the country’s low GDP per capita notwithstanding steady growth in recent years, and poor institutional strength that is weak overall despite relatively strong monetary and fiscal institutions. The change in both the macro profile and the government’s outlook reflect increasing concerns about the strength of the country’s institutional framework in light of ongoing corruption scandals implicating high ranking government officials that have led to widespread street demonstrations. Credit growth has been robust over the past several years, fueled by the still steadily growing economy. Competition within the banking system has recently tightened, in line with the entrance of strong regional franchises.

At the same time, Industrial’s BCA continues to reflect a number of important credit strengths, including the bank’s historically strong asset quality, its ample base of relatively low-cost core deposits and proven access to international capital markets, as well as substantial liquid resources and growing earnings that leverage the bank’s leading position in the Guatemalan banking system.

Moody’s also downgraded Industrial’s local currency deposit ratings to Ba1/Not Prime from Baa3/Prime-3, and also downgraded the foreign currency senior debt rating of Industrial Senior Trust to Ba1 from Baa3. These downgrades reflect a change in the anchor rating for government support to Guatemala’s Ba1 government bond rating, based on Moody’s revised assessment of the government’s capacity to provide support to banks. Previously, when imputing government support assumptions in bank ratings, deposit and senior unsecured debt ratings were, in certain cases, positioned above their relevant sovereign rating, as was the case for Banco Industrial. This reflected an expectation that the extensive policy tools available to central banks to support domestic banks could result in a capacity for the sovereign to provide support to its country’s banks that is higher than its own creditworthiness. However, insights gained from historical experiences showed that when a crisis is prolonged, these measures remain insufficient to restore confidence in the system and an outright recapitalization of the banks is necessary.

Industrial’s Ba2/Not Prime foreign currency deposit rating was affirmed and remains constrained by the Ba2 sovereign ceiling for foreign currency deposits.

As a result of the lower adjusted BCA, Moody’s downgraded the foreign currency subordinated debt rating of Industrial Subordinated Trust to B1 from Ba3. The subordinate debt rating is notched down from the bank’s adjusted BCA to reflect higher expected loss severity in the event of a default. In addition, Moody’s downgraded Industrial’s foreign currency junior subordinate debt rating to B3(hyb) from B1(hyb). The three-notch differential between that rating and the bank’s ba3 adjusted BCA also reflects the notes’ non-cumulative coupon -skip mechanism and optional deferral features.

Industrial Senior Trust and Industrial Subordinated Trust are Cayman Islands-based vehicles, guaranteed by Banco Industrial.

Moody’s also assigned Ba1(cr) and Not Prime(cr) CR assessments to Banco Industrial and withdrew the rating outlook on both Banco Industrial’s foreign currency junior subordinate debt rating and Industrial Subordinated Trust’s foreign currency subordinated debt rating for Moody’s own business reasons.

The outlook on all senior debt and deposit ratings was changed to negative, in line with the outlook on Guatemala’s government bond rating. A downgrade of the sovereign bond rating would drive a further downgrade of the bank’s deposit and senior debt ratings. Upward changes on the BCA and the subordinated and junior subordinated debt ratings would hinge on a sustained and substantial increase in capital, increasing earnings generation and continued strong asset quality. Further downward pressure on the BCA and on the ratings could emerge should Industrial continue to grow robustly without the ongoing assistance from its shareholders. A significant decline in asset quality or profitability could also trigger a downgrade in those ratings.

— BANRESERVAS’S ADJUSTED BCA LOWERED; ALL OTHER RATINGS AFFIRMED

Banreservas’s adjusted BCA was lowered to b3 from b1 and is now in line with the bank’s BCA, as Moody’s reclassified support from the bank’s owner, the Dominican government, to public support from affiliate support. While public support is reflected in the bank’s debt and deposit ratings, it is not captured in the adjusted BCA as is affiliate support. The b3 BCA reflects the bank’s modest capital, high single-borrower concentrations, and net interest margins that are below the system average. While capitalization has been enhanced by the passage of a law in December 2014 that aims to nearly double the bank’s reported paid-in capital by 2016 from year-end 2014 levels, it is expected to remain weak due to continued rapid loan growth, which also increases asset quality risks. These credit challenges are in part offset by the bank’s access to captive sources of funding, particularly from the national government and government-related entities, as well as its healthy liquidity buffers. The BCA also considers the DR’s Weak macro profile, which incorporates the country’s weak institutions, reflected by its low World Bank governance indicators and a mixed track record of macroeconomic stability. In addition, weak external finances and low levels of foreign exchange reserves leave the country vulnerable to event risks. These challenges are only partly mitigated by the country’s economic dynamism.

Banreservas’s B1/Not Prime local currency deposit ratings and B2/Not Prime foreign currency deposit ratings and the B2 foreign currency subordinated debt rating were affirmed. The local currency deposit rating receives two notches of uplift from the BCA owing to Moody’s assumption of full government support, based on the government’s full ownership of the bank, the close financial and business links between the bank and the government, and the importance of Banreservas’s deposit and lending franchise. The foreign currency deposit rating remains constrained by the B2 sovereign ceiling for foreign currency deposits. The bank’s foreign currency subordinated debt rating is one notch below the bank’s local currency deposit rating, benefiting from an assumption of high government support.

In addition, Moody’s assigned B1(cr) and Not Prime(cr) CR assessments to Banreservas and withdrew the outlook on Banreservas foreign currency subordinate debt rating for Moody’s own business reasons.

The bank’s deposit ratings carry a stable outlook, reflecting the government’s stable outlook. Given the expectation of full government support, the bank’s ratings would only be likely to change following a change in the Dominican Republic’s sovereign rating.

— BANCO DE LOS TRABAJADORES’S RATINGS AFFIRMED; COUNTERPARTY RISK ASSESSMENTS ASSIGNED

Moody’s affirmed the BCA and adjusted BCA of b1 and affirmed with a stable outlook the Ba3/ Not Prime local and foreign currency deposit ratings of Bantrab. The BCA considers Bantrab’s well managed asset quality, which owes in part the bank’s preferential creditor status in Guatemala, coupled with its relatively stable and granular deposit funding. Key constraints to the BCA are its weak core capital and very limited business diversification, with the loan book highly concentrated in consumer loans to Guatemalan public sector workers. The Ba3 local and foreign currency deposit ratings incorporate one notch of uplift due to the assessment of a moderate probability of government support, based on the bank’s importance as a lender to Guatemalan public sector workers.

The Ba3 foreign currency senior debt rating assigned to Bantrab Senior Trust was affirmed, as was the B2 foreign currency subordinated debt rating assigned to Bantrab Capital Notes Trust, which remains one notch below the bank’s b1 adjusted BCA. Bantrab Senior Trust and Bantrab Capital Notes Trust are Cayman Islands-based vehicles, guaranteed by Bantrab. Moody’s also assigned a Ba2(cr) and Not Prime(cr) CR assessments to Bantrab and withdrew the rating outlook on Bantrab Capital Notes Trust foreign currency subordinate debt rating for Moody’s own business reasons.

The outlook on the deposit and senior debt ratings is stable. Upward pressures on the bank and trust ratings could occur if core capital increases substantially and sustainably, coupled with the management of a high pace of growth without a deterioration in asset quality. The ratings could face downward pressure if asset quality deteriorates rapidly, resulting in weaker earnings and capitalization.

— GLOBAL BANK’S RATINGS AFFIRMED; COUNTERPARTY RISK ASSESSMENTS ASSIGNED

Moody’s affirmed the BCA and adjusted BCA of ba1 and affirmed with a stable outlook the Ba1/Not Prime foreign currency deposit ratings of Global Bank. The BCA reflects the bank’s expanding profitability and its stable retail deposit funding structure. The key rating constraint relates to asset quality risk deriving from above system-average loan growth, especially in the context of a decelerating economy, the potential rise in US interest rates and high single-borrower concentrations.

The BCA also considers Panama’s Moderate macro profile, which reflects its moderate GDP per-capita and good prospects for continued sustainable growth. However, the country’s high degree of economic openness and large current account deficit leave it moderately susceptible to event risks. While dollarization has been fundamental to the country’s success, it also creates funding risks for its banks given the absence of a lender of last resort. As a result of this, as is the case with BICSA, Global Bank does not benefit from public support.

The bank’s ratings could face upward pressure if the loan growth slows to a more sustainable pace without a deterioration in profitability indicators and slower economic growth does not result in deterioration in asset quality. On the other hand, downward rating pressure could emerge if non-performing loans, and hence loan loss provisions, increase by more than Moody’s expects. Moody’s assigned the bank Baa3(cr)/Prime-3(cr) CR assessments.

— BLADEX’S RATINGS AFFIRMED; COUNTERPARTY RISK ASSESSMENTS ASSIGNED

Moody’s affirmed the baa2 BCA and adjusted BCA of Bladex as well as its Baa2/Prime-2 foreign currency deposit and debt ratings with a stable outlook, reflecting the bank’s strong asset quality and capitalization. Bladex benefits from its specialized expertise in trade finance in Latin America and the Caribbean, with financial institutions, corporations and middle-market companies across the region. The bank also benefits from preferential creditor status with most countries given its ownership and control by the region’s central banks or their designees.

Asset quality may nevertheless come under pressure as a result of the bank’s strong loan growth and large borrower concentrations amid slower growth of Latin America’s economies. This risk is partly mitigated by the bank’s emphasis on trade finance and its growth focus in more stable and strategic industries and countries. The bank also faces challenges related to its narrow net interest margins, owing to the bank’s emphasis on short-term trade lending, a very competitive and low margin business, as well as its heavy reliance on short-term wholesale funding, particularly as the bank has no true lender of last resort. Refinancing risk is balanced in part by relatively stable deposit funding from its shareholders and efforts to diversify funding sources and extend liability maturities by issuing debt in regional and global markets.

Given the heavy reliance of the bank’s business model on wholesale funding, the ratings are unlikely to face upward pressure. Downward rating pressure could result if asset quality, capitalization or profitability deteriorates.

While Bladex’s BCA incorporates the implicit support of its Class A shareholders, the 23 central banks in the region or their designees, its deposit and debt ratings do not derive further uplift from the BCA owing to parental support because of the consortium nature of the ownership structure and the fact that the bulk of the bank’s shares are publicly traded. There is also no government support uplift because Bladex is a dollar-based supranational bank without a true lender of last resort. Moody’s also assigned Baa1(cr)/Prime-2(cr) CR assessments to Bladex.

RATIONALE FOR COUNTERPARTY RISK ASSESSMENTS

Moody’s has also assigned CR assessments to all the eight aforementioned banks. CR assessments are opinions of how counterparty obligations are likely to be treated if a bank fails, and are distinct from debt and deposit ratings in that they (1) consider only the risk of default rather than expected loss and (2) apply to counterparty obligations and contractual commitments rather than debt or deposit instruments. The CR assessment is an opinion of the counterparty risk related to a bank’s covered bonds, contractual performance obligations (servicing), derivatives (e.g., swaps), letters of credit, guarantees and liquidity facilities.

The CR Assessment takes into account the issuer’s standalone strength as well as the likelihood of affiliate and government support in the event of need, reflecting the anticipated seniority of these obligations in the liabilities hierarchy. The CR Assessment also incorporates other steps authorities can take to preserve the key operations of a bank should it enter a resolution.

In most cases, the starting point for the CR Assessment, which is an assessment of the bank’s ability to avoid defaulting on its operating obligations, is one notch above the bank’s adjusted BCA, to which Moody’s then typically adds the same notches of support uplift as applied to deposit and senior unsecured debt ratings. This reflects Moody’s views that authorities are likely to honor the operating obligations the CR Assessment refers to in order to preserve a bank’s critical functions and reduce potential for contagion. However, since most Central American banks have deposit and senior debt ratings at par with the sovereign ratings, Moody’s has assigned a CR Assessment at the same level for most of the aforementioned banks.

List of All of the Affected Ratings:

Banco de Costa Rica

– Long-term global local currency deposit rating: Affirm at Ba1, stable outlook

– Short-term global local currency deposit rating: Affirm at Not Prime

– Long-term foreign currency deposit rating: Affirm at Ba2, stable outlook

– Short-term foreign currency deposit rating: Affirm at Not Prime

– Long-term foreign currency senior unsecured debt rating: Affirm at Ba1, stable outlook

– Baseline credit assessment: Lower to ba2 from ba1

– Adjusted baseline credit assessment: Lower to ba2 from ba1

– Long-term counterparty risk assessment: Assigned at Ba1(cr)

– Short-term counterparty risk assessment: Assigned at Not Prime(cr)

– Outlook: Stable

Banco Nacional de Costa Rica

– Long-term global local currency deposit rating: Affirm at Ba1, stable outlook

– Short-term global local currency deposit rating: Affirm at Not Prime

– Long-term foreign currency deposit rating: Affirm at Ba2, stable outlook

– Short-term foreign currency deposit rating: Affirm at Not Prime

– Long-term foreign currency senior unsecured debt rating: Affirm at Ba1, stable outlook

– Baseline credit assessment: Lower to ba2 from ba1

– Adjusted baseline credit assessment: Lower to ba2 from ba1

– Long-term counterparty risk assessment: Assigned at Ba1(cr)

– Short-term counterparty risk assessment: Assigned at Not Prime(cr)

– Outlook: Stable

Banco Internacional de Costa Rica, S.A.

– Long-term foreign currency deposit rating: Downgrade to Ba2 from Ba1, stable outlook

– Short-term foreign currency deposit rating: Affirm at Not Prime

– Baseline credit assessment: Affirmed at ba2

– Adjusted baseline credit assessment: Lower to ba2 from ba1

– Long-term counterparty risk assessment: Assigned at Ba1(cr)

– Short-term counterparty risk assessment: Assigned at Not Prime(cr)

– Outlook: Stable

Banco Industrial, S.A.

– Long-term global local currency deposit rating: Downgrade to Ba1 from Baa3, negative outlook

– Short-term global local currency deposit rating: Downgrade to Not Prime from Prime-3

– Long-term foreign currency deposit rating: Affirm at Ba2, negative outlook

– Short-term foreign currency deposit rating: Affirm at Not Prime

– Long-term foreign currency junior subordinate debt rating: Downgrade to B3(hyb) from B1(hyb)

– Baseline credit assessment: Lower to ba3 from ba1

– Adjusted baseline credit assessment: Lower to ba3 from ba1

– Long-term counterparty risk assessment: Assigned at Ba1(cr)

– Short-term counterparty risk assessment: Assigned at Not Prime(cr)

– Outlook: Negative

Industrial Senior Trust

– Long-term global foreign currency senior debt rating: Downgrade to Ba1 from Baa3, negative outlook

– Outlook: Negative

Industrial Subordinated Trust

– Long-term global foreign currency subordinated debt rating: Downgrade to B1 from Ba3

Banco de Reservas de la Republica Dominicana

– Long-term global local currency deposit rating: Affirm at B1, stable outlook

– Short-term global local currency deposit rating: Affirm at Not Prime

– Long-term foreign currency deposit rating: Affirm at B2, stable outlook

– Short-term foreign currency deposit rating: Affirm at Not Prime

– Long-term foreign currency subordinate debt rating: Affirm at B2

– Baseline credit assessment: Affirm at b3

– Adjusted baseline credit assessment: Lower to b3 from b1

– Long-term counterparty risk assessment: Assigned at B1(cr)

– Short-term counterparty risk assessment: Assigned at Not Prime(cr)

– Outlook: Stable

Global Bank Corporation and Subsidiaries

– Long-term foreign currency deposit rating: Affirm at Ba1, stable outlook

– Short-term foreign currency deposit rating: Affirm at Not Prime

– Baseline credit assessment: Affirm at ba1

– Adjusted baseline credit assessment: Affirm at ba1

– Long-term counterparty risk assessment: Assigned at Baa3(cr)

– Short-term counterparty risk assessment: Assigned at Prime-3(cr)

– Outlook: Stable

Banco de los Trabajadores

– Long-term global local currency deposit rating: Affirm at Ba3, stable outlook

– Short-term global local currency deposit rating: Affirm at Not Prime

– Long-term foreign currency deposit rating: Affirm at Ba3, stable outlook

– Short-term foreign currency deposit rating: Affirm at Not Prime

– Baseline credit assessment: Affirm at b1

– Adjusted baseline credit assessment: Affirm at b1

– Long-term counterparty risk assessment: Assigned at Ba2(cr)

– Short-term counterparty risk assessment: Assigned at Not Prime(cr)

– Outlook: Stable

Bantrab Senior Trust

– Long-term global foreign currency senior debt rating: Affirm at Ba3, stable outlook

– Outlook: Stable

Bantrab Capital Notes Trust

– Long-term global foreign currency subordinated debt rating: Affirm at B2

Banco Latinoamericano de Comercio Exterior

– Long-term foreign currency deposit rating: Affirm at Baa2, stable outlook

– Short-term foreign currency deposit rating: Affirm at Prime-2

– Long-term foreign currency senior unsecured MTN program rating: Affirm at (P)Baa2

– Short-term foreign currency senior unsecured MTN program rating: Affirm at (P)Prime-2

– Long-term foreign currency senior unsecured debt rating: Affirm at Baa2, stable outlook

– Baseline credit assessment: Affirm at baa2

– Adjusted baseline credit assessment: Affirm at baa2

– Long-term counterparty risk assessment: Assigned at Baa1(cr)

– Short-term counterparty risk assessment: Assigned at Prime-2(cr)

– Outlook: Stable

Last rating actions

The last rating action on Banco de Costa Rica was on 17 March 2015, when the bank’s ba1 BCA and adjusted BCA were placed on review for possible downgrade.

The last rating action on Banco Nacional de Costa Rica was on 17 March 2015, when the bank’s ba1 BCA and adjusted BCA were placed on review for possible downgrade.

The last rating action on Banco Internacional de Costa Rica was on 17 March 2015, when the bank’s ba1 adjusted BCA and the Ba1 foreign currency deposit rating were placed on review for possible downgrade.

The last rating action on Banco Industrial was on 17 March 2015, when Moody’s placed on review for possible downgrade the bank’s BCA, adjusted BCA, local currency deposit rating and foreign currency junior subordinate debt rating.

The last rating action on Industrial Senior Trust was on 17 March 2015, when the Baa3 foreign currency senior debt rating was placed on review for possible downgrade.

The last rating action on Industrial Subordinated Trust was on 17 March 2015, when the Ba3 foreign currency subordinated debt rating was placed on review with direction uncertain.

The last rating action on Banco de Reservas de la Republica Dominicana was on 17 March 2015, when the bank’s b1 adjusted BCA was placed on review for possible downgrade.

The last rating action on Global Bank Corporation and Subsidiaries was on 17 December 2014, when the bank’s ratings were affirmed.

The last rating action on Banco de los Trabajadores was on 17 April 2015, when the bank’s ratings were affirmed.

The last rating action on Bantrab Senior Trust was on 17 April 2015, when the Ba3 foreign currency senior debt rating was affirmed.

The last rating action on Bantrab Capital Notes Trust was on 17 April 2015, when a B2 foreign currency subordinated debt rating was assigned.

The last rating action on Bladex was on 1 May 2015, when Moody’s assigned the bank a Baa2 long-term foreign currency senior unsecured debt rating.

The principal methodology used in these ratings was Banks published in March 2015. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody’s rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider’s credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this rating action, and whose ratings may change as a result of this rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

The below contact information is provided for information purposes only. Please see the ratings tab of the issuer page at www.moodys.com, for each of the ratings covered, Moody’s disclosures on the lead analyst and the Moody’s legal entity that has issued the ratings.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody’s legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Georges Hatcherian
Analyst
Financial Institutions Group
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Maria Celina Vansetti-Hutchins
MD – Banking
Financial Institutions Group
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