Global Bank Corporation y Subsidiarias Senior Unsecured Notes For Up To $500 Million Rated 'BBB-'

MEXICO CITY (S&P Global Ratings) April 5, 2019--S&P Global Ratings today 
assigned its 'BBB-' issue-level rating to Global Bank Corporation y 
Subsidiarias' (GBC; BBB-/Stable/A-3) proposed senior unsecured notes for up to 
$500 million. The tenure of the notes will be up to 10 years and they will 
bear a fixed rate. The bank plans to use the proceeds to extend its debt 
maturity profile and substitute upcoming debt that matures this year.

The rating on the notes is the same as our long-term issuer rating on the 
bank, reflecting the debt's pari passu ranking in right of payment with all of 
GBC's senior unsecured debt obligations. 

Taking into consideration the proposed issuance, our funding and liquidity 
assessment on the bank will remain stable. This transaction will substitute 
existing short-term debt with long-term debt, improving GBC's maturity profile 
and giving it higher financial flexibility to meet its financial obligations. 
We view GBC's ability to access to diverse funding sources as positive, 
because the long tenors help the bank to better manage the maturity gaps in 
its balance sheet. 

We continue to assess GBC's funding as average compared to the industry norm. 
The bank's funding structure continues to mainly consist of customer deposits, 
which accounted for 65% of the bank's total funding base as of December 2018. 
The remaining 35% is made up of interbank credit loans (12%); corporate bonds 
(18%); and subordinated debt, commercial paper, repurchase agreements, and 
other liabilities. The new issuance will represent 26% of GBC's total market 
debt and 6.5% of total liabilities as of December 2018.

The bank's stable funding ratio was 99% as of December 2018, and we expect 
this to improve to above 100% after the proposed notes replace the 2019 market 
obligations. We continue to believe that despite a high proportion of 
wholesale funding, GBC's refinancing risk has remained limited, given a 
manageable debt maturity profile. We don't expect any major changes in the 
bank's funding structure during the next 12-24 months, even though we expect 
the bank to continue its gradual funding diversification strategy. 

We base GBC's liquidity assessment on the bank's adequate liquidity ratios and 
prudent liquidity management. After the expected issuance, we expect liquidity 
levels to slightly improve because of the more flexible debt maturity profile. 
Additionally, the bank's broad liquid assets covered in excess its next 
12-month wholesale maturities by 1.23x as of December 2018, with a 2.6x 
three-year average. We expect these metrics to remain comfortably above 1.0x 
in the next two years.

Our ratings on GBC also reflect its satisfactory business stability, supported 
by its solid market access in the highly competitive Panamanian banking 
system. The ratings also incorporate GBC's adequate internal capital 
generation, supported by stable operating revenue results and the recent 
capital injection to support the Banvivienda acquisition. These factors should 
keep our consolidated risk-adjusted capital ratio slightly above 7%, on 
average, over the next 24 months. We also base the ratings on GBC's manageable 
asset quality metrics, with nonperforming asset (NPAs) and credit loss ratios 
in line with its regional peers.
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