Fitch Affirms Nacional Financiera's IDRs at 'BBB+'/'A-'; Outlook Stable

MONTERREY, Mexico--()--Fitch Ratings has affirmed the Long-term foreign and local currency Issuer Default Ratings (IDRs) of Nacional Financiera, S.N.C. (Nafin) at 'BBB+' and 'A-', respectively. In addition, Fitch affirms Nafin'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 Scale Ratings

Nafin's IDRs and Outlook are aligned with Mexico's sovereign ratings and reflect both the high ability and the propensity of the sovereign to support Nafin, if needed. The ability of support is reflected in the investment grade rating of 'BBB+' of Mexico while the propensity of support relies on Nafin's explicit guarantee stated in its Organic Law (Article 10). Nafin's national ratings are at the highest grade in the ratings scale.

Under this law, the Mexican government is explicitly responsible for the operations held by Nafin with domestic or foreign institutions, as well as for its deposits. The propensity to support the bank also considers the high importance of Nafin as the second largest development bank in Mexico in terms of total assets and loan portfolio and that the Mexican federal government is its major shareholder (99.99%).

RATING SENSITIVITIES

The Rating Outlook is Stable and is in line with the Rating Outlook of Mexico's ratings; therefore, no changes are expected to Nafin's ratings in the short or medium term. Nafin'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.

KEY RATING DRIVERS - Support and Support Rating Floor

Fitch affirmed Nafin's Support Rating and Support Rating floor at '2' and 'BBB+', respectively, given its important policy role as the second largest development bank in Mexico and the full guarantee it has from the sovereign. Nafin's key role is to encourage the development of private sector micro, small and medium enterprises (SMEs) by providing financing options and general services. Its credit activities are mainly 2nd floor loans (financial intermediaries) and to a less extent, but gradually growing, 1st floor loans, however, the entity has become an important player at providing guarantees. 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

A potential upgrade or downgrade of Nafin'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 are unlikely factors at present.

Fitch has affirmed Nafin's ratings as follows:

--Long-term foreign currency IDR at 'BBB+';

--Long-term local currency IDR at 'A-';

--Short-term foreign and local currency IDRs 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 and Related Research:

--'Global Financial Institutions Rating Criteria' (March 20, 2015);

--'National Scale Ratings Criteria' (Oct. 30, 2013).

Applicable Criteria and Related Research:

Global Bank Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=863501

National Scale Ratings Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=720082

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=984303

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Contacts

Fitch Ratings
Primary Analyst
Diego Garcia
Analyst
+52 818 399 9100
Fitch Mexico S.A. de C.V.
Prol. Alfonso Reyes 2612
64920 Monterrey, Mexico
or
Secondary Analyst
Monica Ibarra
Director
+52 818 399 9150
or
Committee Chairperson
Theresa Paiz Fredel
Senior Director
+1-212-908-0534
or
Media Relations
Elizabeth Fogerty, 1 212-908-0526
elizabeth.fogerty@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Diego Garcia
Analyst
+52 818 399 9100
Fitch Mexico S.A. de C.V.
Prol. Alfonso Reyes 2612
64920 Monterrey, Mexico
or
Secondary Analyst
Monica Ibarra
Director
+52 818 399 9150
or
Committee Chairperson
Theresa Paiz Fredel
Senior Director
+1-212-908-0534
or
Media Relations
Elizabeth Fogerty, 1 212-908-0526
elizabeth.fogerty@fitchratings.com