Fitch Ratings has assigned Hannibal Lease SA's (HL) subordinated debt securities a 'B-(tun)' National Long-Term Rating.

Key Rating Drivers

The subordinated notes are direct, unsecured and subordinated obligations of HL. Their rating is notched down twice from HL's National Long-Term Rating of 'B+(tun)' to reflect our expectation of poor recoveries. The notes are subordinate to HL's senior unsecured debt and qualify as Tier 2 capital in accordance with Tunisian prudential regulations. As the notes do not contain coupon deferral clauses, Fitch has not applied additional notches for non-performance risk.

RATING SENSITIVITIES

The rating on the subordinated debt is principally sensitive to changes in HL's National Long-Term Rating as well as in changes in Fitch's recovery expectations for the instruments.

Factors that could, individually or collectively, lead to positive rating action/upgrade:

Upside potential for HL's National Long-Term Rating is limited, given challenging operating conditions and it is therefore difficult for HL to improve its credit profile relative to other Tunisian companies.

Factors that could, individually or collectively, lead to negative rating action/downgrade:

HL's National Long-Term Rating is sensitive to further deterioration in Tunisia's operating environment for leasing and factoring companies. This could be evidenced by a higher-than-expected increase in HL's impaired and non-performing loan ratio. The rating is also sensitive to further depletion of HL's capital buffer, leading to lower resilience to asset-quality risks, as well as a weakening of its funding profile.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

RATING ACTIONS

Entity / Debt

Rating

Hannibal Lease SA

subordinated

Natl LT

B-(tun)

New Rating

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VIEW ADDITIONAL RATING DETAILS

Additional information is available on www.fitchratings.com

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