Fitch Expects to Rate Banco de Credito del Peru's Subordinated Notes Maturing 2027 'BBB(exp)'

Fitch Ratings expects to rate Banco de Credito del Peru's (BCP) upcoming U.S. dollar subordinated notes 'BBB(exp)'. The notes - for an amount to be determined - will be issued by BCP through its Panamanian branch. The notes will be consolidated and form a single series with the existing $520 million subordinated notes that BCP originally issued on April 24, 2012.

Principal under the notes will mature on April 24, 2027, and interest payments will be made on April 24 and Oct. 24 of each year until 2022 and on Jan. 24, April 24, July 24 and Oct. 24 from 2023 until maturity. The notes will carry a fixed interest rate of 6.125% until 2022 and a LIBOR-based floating rate starting on 2023. The final rating is contingent upon the receipt of final documents conforming to information already received.

KEY RATING DRIVERS

BCP has a long-term local and foreign currency Issuer Default Ratings (IDR) of 'BBB+'; both of them driven by BCP's Viability Rating (VR), which is currently at 'bbb+'. BCP's ratings reflect its dominant franchise; large market share; sound performance; diversified balance sheet and revenue stream; broad, low-cost deposit base; sound asset quality; and adequate reserves and capital. Following Fitch's criteria, the notes will be rated one notch below BCP's VR, reflecting one notch for loss-severity, but no notches for incremental non-performance risk relative to the bank's VR.

The notes rank junior to BCP's senior unsecured debt and will be effectively subordinated to all of BCP's secured indebtedness with respect to the value of its assets securing that indebtedness, certain direct, unsecured general obligations that in case of insolvency are granted preferential treatment pursuant to Peruvian law, and all of the existing and future liabilities of BCP's subsidiaries, including trade payables. The notes will rank pari-passu with all of BCP's existing and future subordinated debt and will be senior to BCP's existing and future junior subordinated debt.

BCP will use the proceeds for general business purposes. Considering the bank's solid capital levels and sound profitability, the impact on the bank's leverage is not deemed significant by Fitch.

RATING SENSITIVITIES

The subordinated notes' rating is sensitive to any changes in BCP's VR. In particular, BCP's VR are highly correlated with the strength of the Peruvian economy; should the economic environment continue to improve, as is reflected in its sovereign ratings, and the bank maintain a consistent performance and its structural strengths, BCP's ratings could be upgraded.

Though not Fitch's base case, BCP's VR and IDRs could suffer if operating environment deterioration materially affects the bank's asset quality and performance, and leads to an erosion of the bank's reserve and capital cushions.

Fitch currently rates BCP as follows:

--Long-term foreign currency IDR 'BBB+', Stable Outlook;

--Short-term foreign currency IDR 'F2';

--Long-term local currency IDR 'BBB+', Stable Outlook;

--Short-term local currency IDR 'F2';

--Viability Rating 'bbb+';

--Support rating '2';

--Support floor 'BBB-';

--Senior unsecured debt 'BBB+';

--Subordinated debt 'BBB';

--Junior subordinated debt 'BB-'.

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

Applicable Criteria and Related Research:

--'Global Financial Institutions Rating Criteria' (Aug. 15, 2012);

--'Assessing and Rating Bank Subordinated and Hybrid Securities' (Dec. 5, 2012).

Applicable Criteria and Related Research:

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686181

Assessing and Rating Bank Subordinated and Hybrid Securities

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=695542

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=814802

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