Fitch Ratings on June 9 upgraded Banco Popular Español SA's long- and short-term issuer default ratings to A-/F2 from B/B and removed the short-term rating from Rating Watch Negative, following the bank's acquisition by Banco Santander SA.
The long-term rating carries a stable outlook. The rating agency also downgraded Banco Popular's viability rating to "f" from "b", upgraded the support rating to 1 from 5 and affirmed the support rating floor at No Floor. The bank's viability rating and support rating were subsequently withdrawn.
The upgrade of the issuer default ratings reflects an extremely high probability of support to Banco Popular by Santander. The downgrade of the viability rating reflects Banco Popular's failure in the form of the resolution action taken by the Single Resolution Board.
At the same time, the agency affirmed Santander's long- and short-term issuer default ratings at A-/F2, with a stable outlook on the long-term rating. The agency also affirmed the bank's "a-" viability rating, while its derivative counterparty rating was affirmed at A-(dcr). The bank's support rating and support rating floor were affirmed at 5 and No Floor, respectively.
Fitch also affirmed Banco Santander unit Santander International Debt SA's long- and short-term senior unsecured debt ratings at A-/F2.