MONTERREY, Mexico--(BUSINESS WIRE)--Fitch Ratings has affirmed the Long-Term Foreign Currency and Local Currency Issuer Default Ratings (IDRs) of Banco Nacional de Comercio Exterior, S.N.C. (Bancomext) at 'BBB+' and 'A-', respectively. In addition, Fitch affirms Bancomext's Short-Term IDRs at 'F2', its Support Rating at '2', Support Rating Floor at 'BBB+', and its Long- and Short-term National Scale Ratings at 'AAA(mex)' and 'F1+(mex)', respectively. The entity's local senior unsecured debt issues were also affirmed at 'AAA(mex)'. The Rating Outlook on the Long-Term Ratings is Stable. A full list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
IDRs and NATIONAL RATINGS
Bancomext's IDRs and Rating Outlook are aligned with Mexico's sovereign ratings and reflect the high ability and propensity of support from the country's federal government if needed. The ability of support is reflected in the investment grade rating of 'BBB+' of Mexico while the propensity of support relies on Bancomext's explicit guarantee stated in its Organic Law (Article 10) which says that the Mexican government is responsible for domestic or foreign operations carried out by Bancomext. Specifically, the Mexican Government shall be responsible, at all times, for transactions entered into by Bancomext with Mexican individuals and companies, and non/Mexican private, governmental and intergovernmental institutions, among others.
The propensity of support also considers Bancomext's strategic role and high relevance in the Mexican federal government's execution of its economic objectives, specifically in financing Mexican foreign trade activities and developing such sector. The bank's main objective is to finance Export-Import (Ex-Im) activities of the public and private sectors, with a greater emphasis on small and medium enterprises (SMEs). Bancomext provides direct (first floor) and indirect (second floor) financing, guarantees schemes and technical assistance to export companies to expand its production capacity.
Bancomext has adapted its strategy to the current global conditions and has redefined some of its strategic lines, without neglecting its core business. Bancomext is more focused on developing the first stage of large investment projects in order to promote in the mid-term the participation of other financial agents through syndicated loans. Also, Bancomext is promoting more integration between national export companies and global value chains of export activity, is developing the use of new Ex-Im products, and is encouraging the use of guarantee schemes, among other initiatives.
Bancomext's national ratings are at the highest grade in the ratings scale since national scale ratings are relative ratings of creditworthiness within a certain jurisdiction.
SUPPORT RATING AND SUPPORT RATING FLOOR
Fitch affirmed Bancomext's Support Rating and Support Rating Floor at '2' and 'BBB+', respectively, given its important policy role as the third largest development bank in Mexico and the full guarantee it has from the sovereign. Fitch's Support Rating Floors indicate a level below which the agency will not lower the bank's Long-Term IDRs as long as the assessment of the support factors does not change.
RATING SENSITIVITIES
The Rating Outlook is Stable and is in line with the Rating Outlook of Mexico's ratings, so no changes are expected to Bancomext's ratings in the short or medium term. Bancomext's ratings would reflect any change in Mexico's sovereign ratings, given that the bank's IDRs are driven by the explicit support granted by the Mexican federal government in its organic law.
SUPPORT RATING AND SUPPORT RATING FLOOR
A potential upgrade or downgrade of Bancomext's Support Rating and Support Rating Floor will be driven by a change in Mexico's sovereign rating and/or a change in the expected propensity of support from the Mexican government; both unlikely factors at present.
Fitch has affirmed Bancomext's ratings as follows:
--Long-Term Foreign Currency IDR at 'BBB+';
--Long-Term Local Currency IDR at 'A-';
--Short-Term Foreign Currency IDR at 'F2';
--Short-Term Local Currency IDR at 'F2'
--Support Rating at '2';
--Support Rating Floor at 'BBB+';
--National Scale Long-Term Rating at 'AAA(mex)';
--National Scale Short-Term Rating at 'F1+(mex)';
--Local senior unsecured debt issues at 'AAA(mex)'.
The Rating Outlook is Stable.
Additional information is available on www.fitchratings.com
Applicable Criteria
Global Bank Rating Criteria (pub. 20 Mar 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=863501
National Scale Ratings Criteria (pub. 30 Oct 2013)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=720082
Additional Disclosures
Dodd-Frank Rating Information Disclosure Form
https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1004111
Solicitation Status
https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1004111
Endorsement Policy
https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31
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