June 12, 2017 / 2:09 PM / 6 months ago

Fitch Rates Synchrony Bank's Senior Unsecured Notes 'BBB-'

(The following statement was released by the rating agency) NEW YORK, June 12 (Fitch) Fitch Ratings has assigned a 'BBB-' rating to Synchrony Bank's (SYB) issuance of $750 million, five-year, fixed-rate senior unsecured notes. SYB is the bank subsidiary of Synchrony Financial (SYF, 'BBB-'/Outlook Stable). These notes are the first issuance from the bank, which recently established a global bank note program. KEY RATING DRIVERS VRs, IDRS, AND SENIOR DEBT As per Fitch's Global Bank Rating Criteria, SYB's senior unsecured debt rating is equalized with its Long-Term Issuer Default Rating (IDR). Fitch views the issuance favorably, as SYB is demonstrating access to the unsecured debt market through its banking subsidiary, further diversifying its funding sources. The issuance is not expected to materially alter SYF's overall funding mix, and proceeds will be used for general corporate purposes. Current ratings for SYF and SYB reflect the company's market leading position in the U.S. private-label credit card industry, seasoned management team, consistent operating performance, strong capitalization and liquidity levels, risk-sharing arrangements with retail partners, and increased funding diversity as a result of strong deposit growth at SYB. Ratings remain constrained by SYF's monoline business model, high retail partner concentration, an above-average mix of non-prime borrowers relative to general-purpose card-issuing peers, potential sensitivity of its deposit base to rising interest rates, and relatively short track record operating as a standalone entity. RATING SENSITIVITIES VRs, IDRS, AND SENIOR DEBT The senior unsecured debt rating is primarily sensitive to changes in SYB's Long-Term IDR and would be expected to move in tandem with that rating. Positive ratings momentum for SYF and SYB could be driven by further diversification of retail partners, a meaningful decline in the percentage of the loan portfolio comprised of nonprime borrowers, limited deterioration in credit performance through a market cycle, demonstrated ability to sustain above-average profitability through credit and interest rate cycles, and continued shift in funding mix toward retail deposits. Furthermore, Fitch believes the durability of SYB's internet-based deposit platform in a rising rate environment will be a key consideration in evaluating the strength of the company's funding profile. Positive rating momentum could also develop from the company's ability to successfully execute on its product expansion and diversification strategy over time while maintaining strong underwriting standards and profit margins. Negative rating momentum could develop from the loss of or default by a key retail relationship, substantial credit quality deterioration, a meaningful reduction in capitalization or liquidity, an inability to access the capital markets on reasonable terms for funding, above-average shareholder distributions relative to peers, and/or potential new and more onerous rules and regulations. Negative rating momentum could also be driven by an inability of SYF to maintain its competitive position and earnings prospects in an increasingly digitized payments and consumer lending landscape. Fitch has assigned the following rating: Synchrony Bank -- Senior unsecured debt 'BBB-'. Fitch currently rates SYF and SYB as follows: Synchrony Financial -- Long-Term IDR 'BBB-'; -- Viability Rating 'bbb-'; -- Senior unsecured debt 'BBB-'; -- Short-Term IDR 'F3'; -- Support Rating '5'; -- Support Rating Floor 'NF'. Synchrony Bank -- Long-Term IDR 'BBB-'; -- Viability Rating 'bbb-' -- Short-Term IDR 'F3'; -- Support Rating '5'; -- Support Rating Floor 'NF'; -- Long-Term Deposits 'BBB'; -- Short-Term Deposits 'F2'. The Rating Outlook is Stable. Contact: Primary Analyst Jared Kirsch, CFA Associate Director +1 212-908-0332 Fitch Ratings, Inc. 33 Whitehall Street New York, NY 10004 Secondary Analyst Michael Taiano, CPA Director +1 646-582-4956 Committee Chairperson Nathan Flanders Managing Director +1 212-908-0827 Media Relations: Hannah James, New York, Tel: + 1 646 582 4947, Email: hannah.james@fitchratings.com. Additional information is available on www.fitchratings.com Applicable Criteria Global Bank Rating Criteria (pub. 25 Nov 2016) here Additional Disclosures Dodd-Frank Rating Information Disclosure Form here Solicitation Status here#solicitation Endorsement Policy here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT 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. DIRECTORS AND SHAREHOLDERS RELEVANT INTERESTS ARE AVAILABLE here. 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. Copyright © 2017 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch’s factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third- party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch’s ratings and reports should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating or a report will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings and its reports, Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings and forecasts of financial and other information are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings and forecasts can be affected by future events or conditions that were not anticipated at the time a rating or forecast was issued or affirmed. The information in this report is provided “as is” without any representation or warranty of any kind, and Fitch does not represent or warrant that the report or any of its contents will meet any of the requirements of a recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and reports made by Fitch are based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating or a report. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at any time for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of the United Kingdom, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers. For Australia, New Zealand, Taiwan and South Korea only: Fitch Australia Pty Ltd holds an Australian financial services license (AFS license no. 337123) which authorizes it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below