Ratings On Various Royal Bank of Scotland Group

March 24, 2009
Ratings On Various Royal Bank of Scotland
Group Hybrid Securities Lowered
Primary Credit Analyst:
Nigel Greenwood, London (44) 20-7176-7211; [email protected]
Secondary Credit Analyst:
Nick Hill, London (44) 20-7176-7216; [email protected]
LONDON (Standard & Poor's) March 24, 2009--Standard & Poor's Ratings Services
said today that it lowered its ratings on various hybrid capital securities
(Hybrids) issued by The Royal Bank of Scotland Group PLC (RBSG; A/Stable/A-1)
by one notch to 'BB-' from 'BB', and Hybrids issued by its main operating
entity The Royal Bank of Scotland PLC (RBS; A+/Stable/A-1) by one notch to
'BB' from 'BB+'. At the same time, we lowered the ratings on preference shares
with voting rights (Preference Shares) of RBSG and National Westminster Bank
PLC (A+/Stable/A-1) by two notches. Furthermore, the ratings on RBSG and RBS
Hybrids and Preference Shares were removed from CreditWatch with negative
implications, where they were placed on Jan. 19, 2009. Our counterparty credit
ratings on RBS and RBSG are unchanged.
The downgrades reflect our view that the Hybrids and Preference Shares
face a marginally heightened risk of nonpayment, given the combination of
economic recession and consequently very weak financial prospects for RBSG,
which have necessitated substantial government support, including capital
injections and an asset protection scheme. In our view, the potential for
further losses, notwithstanding the asset protection scheme, as well as
potential state aid approval conditions, contributes to increased potential
for coupon deferral to preserve capital and cash. With respect to our rating
action on the RBSG Preference Shares, while we consider that the potential for
full nationalization (including the RBSG voting Preference Shares) is probably
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Ratings On Various Royal Bank of Scotland Group Hybrid Securities Lowered
low, we are of the view that the potential for payment interruption should be
reflected by an additional downward notch relative to other perpetual
deferrable instruments. However, we continue to believe that deferral remains
unlikely for the Hybrids and Preference Shares due in part to substantial
capital injections from the government. This will likely lead to relatively
high regulatory capital ratios.
(For more information, see "Various ABN AMRO Bank Junior Subordinated
Debt Ratings Cut To 'BB' After Rating Action On Royal Bank of Scotland Debt,"
published on March 24, 2009, on RatingsDirect.)
RATINGS LIST
To
From
Royal Bank of Scotland Group PLC (The)
US$1.2 bil var rate callable perp regulatory tier I nts ser 1
BBBB/Watch Neg
CAD600 mil var rate callable perp Tier 1 hybrid ser 2851
BBBB/Watch Neg
EUR1.25 bil var rate non-cum trust pfd secs perp
BBBB/Watch Neg
US$750 mil 6.8% callable non-cum trust pfd secs perp
BBBB/Watch Neg
US$850 mil 4.709% non-cum trust pfd secs callable perp
BBBB/Watch Neg
EUR1.25 bil 5.5% non-cum pfd perp secs ser 1
B+
BB/Watch Neg
EUR1.25 bil 5.25% non-cum euro pfd perp secs ser 2
B+
BB/Watch Neg
EUR500 mil 4.243% /fltg perp callable non-cum trust pfd secs
BBBB/Watch Neg
US$200 mil ser A
B+
BB/Watch Neg
US$400 mil ser C
B+
BB/Watch Neg
US$8 mil non-cum pref shrs ser F
B+
BB/Watch Neg
US$200 mil 7.375% reset cap secs
BBBB/Watch Neg
US$300 mil perp non-cum pref shares ser H
B+
BB/Watch Neg
US$225 mil 8.5% perp non-cum pref shares ser J
B+
BB/Watch Neg
US$300 mil 8% perp non-cum pref shares ser I
B+
BB/Watch Neg
US$1.5 bil perp pref sh ser 1 + 2
BBBB/Watch Neg
US$1.5 bil perp pref sh ser 1 + 2
BBBB/Watch Neg
US$50 mil 7.993% perp cap sec ser B
BBBB/Watch Neg
US$850 mil 5.75% callable exchgble cap secs ser B
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Ratings On Various Royal Bank of Scotland Group Hybrid Securities Lowered
BBBB/Watch Neg
callable non-cum perp pref shares ser M
B+
BB/Watch Neg
US$1 bil 6.35% non cum dollar pref shares callable ser N
B+
BB/Watch Neg
US$550 mil 6.25% non-cum dollar callable perp pref shares ser P
B+
BB/Watch Neg
US$675 mil 6.75% non-cum perp callable pref shares ser Q
B+
BB/Watch Neg
US$650 mil 6.125% callable non-cum perp pref shares ser R
B+
BB/Watch Neg
US$950 mil 6.6% callable perp pref shares ser S
B+
BB/Watch Neg
US$1.45 bil 7.25% non cum perp callable pref stk ser T
B+
BB/Watch Neg
EUR1.3 bil var rate callable non-cum perp pref stk ser 3
B+
BB/Watch Neg
US$1.6 bil 6.99% /fltg callable perp pref stk
BBBB/Watch Neg
US$1.5 bil var rate callable non-cum perp pref stk ser U
B+
BB/Watch Neg
£200 mil non-cum pref shares ser 1
B+
BB/Watch Neg
£750 mil 8.162% callable non-cum perp pref stk ser 1
B+
BB/Watch Neg
£5 mil var rate fxd/fltg rate non-cum perp pref stk ser 2
B+
BB/Watch Neg
US$925 mil 6.4%
National Westminster Bank PLC
US$500 mil var rate nts ser C
BB
BB+/Watch Neg
US$500 mil var rate perp nts
BB
BB+/Watch Neg
US$500 mil perp primary fltg rate cap nts ser A
BB
BB+/Watch Neg
US$500 mil perp primary fltg rate cap nts ser B
BB
BB+/Watch Neg
US$500 mil 7.75% perp nts
BB
BB+/Watch Neg
EUR400 mil 6.625% sub perp nts due 10/29/2049
BB
BB+/Watch Neg
EUR100 mil fltg rate sub perp nts
BB
BB+/Watch Neg
£350 mil perp var rate nts
BB
BB+/Watch Neg
£200 mil perp 11.5% sub nts
BB
BB+/Watch Neg
£200 mil step-up sub perp nts
BB
BB+/Watch Neg
£325 mil step-up sub perp nts
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Ratings On Various Royal Bank of Scotland Group Hybrid Securities Lowered
BB
BB+/Watch Neg
non-cum pref shares ser C
BBBB+/Watch Neg
£140 mil 9% non-cum pref shares ser A
BBBB+/Watch Neg
US$300 mil
RBS Capital Trust A(1)
EUR1.25 bil var rate non-cum trust pfd secs perp
BBBB/Watch Neg
RBS Capital Trust B(1)
US$750 mil 6.8% callable non-cum trust pfd secs perp
BBBB/Watch Neg
RBS Capital Trust C(1)
EUR500 mil 4.243% /fltg perp callable non-cum
trust pfd secs
BBBB/Watch Neg
RBS Capital Trust D(1)
£400 mil 5.6457% /fltg perp callable non-cum trust pfd secs
BBBB/Watch Neg
RBS Capital Trust I(1)
US$850 mil 4.709% non-cum trust pfd secs callable perp
BBBB/Watch Neg
RBS Capital Trust II(2)
US$650 mil 6.425% /FRN callable non-cum trust pfd secs perp
BBBB/Watch Neg
RBS Capital Trust III(2)
US$950 mil 5.512% non-cum trust pfd secs callable perp
BBBB/Watch Neg
RBS Capital Trust IV(2)
US$550 mil fltg rate non-cum trust pfd callable secs perp
BBBB/Watch Neg
Royal Bank of Scotland PLC (The)
EUR152.45 mil jr sub step-up nts
BB
BB+/Watch Neg
EUR500 mil var rate fltg perp callable jr sub (Upper Tier II) nts ser 1587
BB
BB+/Watch Neg
EUR1 bil var rate callable perp jr sub (Upper Tier II) nts ser 1589
BB
BB+/Watch Neg
¥25 bil callable jr sub lower tier 2 fxd/fltg med-term nts ser 1818
BB
BB+/Watch Neg
CAD700 mil var rate fxd/fltg step-up callable perp jr sub med-term nts ser
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Ratings On Various Royal Bank of Scotland Group Hybrid Securities Lowered
2595
BB
BB+/Watch Neg
£150 mil fltg rate jr sub perp nts ser 60
BB
BB+/Watch Neg
£175 mil var rate jr sub perp nts ser 144
BB
BB+/Watch Neg
£500 mil var rate callable perp jr sub nts ser 253
BB
BB+/Watch Neg
£350 mil 5.625% jr sub perp callable nts
BB
BB+/Watch Neg
£500 mil 6.2% jr sub callable perp nts ser 352
BB
BB+/Watch Neg
£300 mil 5.625% callable upper tier II perp nts
BB
BB+/Watch Neg
£350 mil 6.25% perp callable jr sub nts ser 238
BB
BB+/Watch Neg
£500 mil 5.125% perp callable jr sub nts ser 619
BB
BB+/Watch Neg
£500 mil 6% callable upper tier II perp nts ser 1522
BB
BB+/Watch Neg
£400 mil var rate/fltg step-up callable perp jr sub nts ser 2538
BB
BB+/Watch Neg
Argon Capital PLC
£750mn 8.162% callable non-cum perp pref
stk issue series 1(1)
B+
BB/Watch Neg
(1) Guaranteed by Royal Bank of Scotland Group PLC (The).
(2) Guaranteed by Royal Bank of Scotland PLC (The).
Additional Contact:
Financial Institutions Ratings Europe;
[email protected]
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