Fitch Rates Industrial Senior Trust's Loan Participation Notes 'BB'

NEW YORK & SAN SALVADOR, El Salvador--(BUSINESS WIRE)--

Fitch Ratings has assigned a 'BB' final long-term foreign currency rating to Industrial Senior Trust's (IST) 10-year USD loan participation notes (the notes).

The final rating of the notes is in line with the Guatemalan Banco Industrial's (BI) 'BB' long-term IDRs, reflecting that the notes will be senior unsecured obligations which will rank equally to BI's unsecured and unsubordinated obligations.

The notes were issued for US$500 million and are secured by IST's sole asset, a 100% participation in and to a senior unsecured loan (the loan) from Bank of America to BI. As part of the transaction, Bank of America transfers its rights on the loan to IST. The notes reflect all the conditions of the loan. Principal under the notes will be paid at maturity of the loan. Interest payments will be made semi-annually, and the rate was fixed at an annual 5.5%.

BI's IDRs are driven by its strong national franchise, sound asset quality, good efficiency, ample deposit base, and sound liquidity which, in turn, are reflected in the bank's viability rating. BI's ratings are constrained by its modest capitalization, moderate profitability, and the relatively high loan portfolio concentrations.

Established in 1968, BI is Guatemala's largest bank, with a market share of 27.6% and 25.4% of the total assets and deposits as of June 2012. BI's primary focus is on commercial and corporate banking. BI's main shareholder is Bicapital Corp., a holding company domiciled in Panama, with assets of US$8.9 billion as of June 2012. Bicapital also owns the Honduras-based Banco del Pais since 2007.

Fitch rates Industrial Senior Trust debt as follows:

--10-year USD loan participation notes 'BB'.

Fitch currently rates BI as follows:

--Long-term IDR 'BB'; Outlook Positive;

--Short-term IDR 'B';

--Local-currency long-term IDR 'BB'; Outlook Positive;

--Local-currency short-term IDR 'B';

--Viability Rating 'bb';

--Support '3';

--Support Rating Floor 'BB-';

--Subordinated Tier I Capital Notes debt 'B-';

--National scale long-term rating 'AA-(gtm)'; Outlook Positive;

--National scale short-term rating 'F1+(gtm)'.

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

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

--'Treatment of Hybrids in Bank Capital Analysis' (July 9, 2012);

--'National Rating Criteria' (Jan. 19, 2011);

--'Central American Banking: Accelerating Growth' (November 15, 2012);

--'Central American Banks Withstand Financial Contagion Well-Positioned for Growth' (July 9, 2012);

--'Improved Efficiency Could Boost Credit Profiles of Central American Banks' (March 7, 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

National Ratings Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=595885

Central American Banking: Accelerating Growth

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=693305

Central American Banks Withstand Financial Contagion Well-Positioned for Growth

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=681536

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