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Fitch Rates People's United Bank's Subordinated Note Issuance 'BBB+'

NEW YORK--(BUSINESS WIRE)--Fitch Ratings assigns a 'BBB+' rating to People's United Bank's (People's) $400 million subordinated note offering. The subordinated note matures in 2024 and has a coupon set at 4.00%. The proceeds of the note issuance will be used for general corporate purposes and will count as Tier 2 regulatory capital.

KEY RATING DRIVERS - SUBORDINATED NOTES

The subordinated notes represent junior obligations of People's, and therefore, the ratings of the subordinated notes are notched once from the bank's viability rating (VR) of 'a-' to reflect potential loss severity.

RATING SENSITIVITIES - SUBORDINATED NOTES

Given that the subordinated notes are notched from People's VR, any changes to the bank's VR will impact the rating of the subordinated notes.

People's VR was last affirmed on Feb. 5, 2014, at which point the Rating Outlook was revised to Negative reflecting the bank's weak earnings and increasing liquidity risk profile. People's VR is sensitive to core earnings levels in a rising rate environment. Should earnings levels continue to rank in the bottom quartile in a rising rate environment, a ratings downgrade is possible.

Additional information is available at 'www.fitchratings.com.'

Applicable Criteria and Related Research:

--'Global Financial Institutions Rating Criteria' (Jan. 31, 2014);

--'Assessing and Rating Bank Subordinated and Hybrid Securities' (Jan. 31, 2014);

--'U.S. Bank HoldCos & OpCos: Evolving Risk Profiles' (Mar. 27, 2014);

--'Fitch Revises People's United's Outlook to Negative After Peer Review; Affirms Ratings at 'A-/F1' (Feb. 5, 2014) .

Applicable Criteria and Related Research:

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=732397

Assessing and Rating Bank Subordinated and Hybrid Securities Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=732137

U.S. Bank HoldCos & OpCos: Evolving Risk Profiles

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=742096

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=836296

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Contacts

Fitch Ratings
Primary Analyst
Jaymin Berg, CPA, +1 212-908-0368
Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Ryan Doyle, +1 212-908-9162
Director
or
Committee Chairperson
Nathan Flanders, +1 212-908-0827
Managing Director
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Media Relations, New York
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brian.bertsch@fitchratings.com