's OH upgraded to 'AA-' from 'A+'; off Rating Watch Positive (RWP), Stable Outlook
The consideration will be satisfied by the issue and allotment of 5,040,750,000 new shares to CEMG's shareholders.
CEMG is a fast-growing media entertainment company that was invested by Sequoia Capital during its early stages and is principally engaged in the production and distribution of films, television drama series and satellite television programmes and television advertising in China.
While the Stable Outlook on CEMG and Totta OH reflects that on the respective banks' IDRs, this is not the case for BCP and CGD OH, whose Stable Outlook does not reflect the Positive Outlook on the respective banks.
CEMG's mortgage covered bonds are rated 'AA-'/Stable, 10 notches above the bank's Long-Term IDR of 'B+'.
The RWP on CEMG
's OH reflects the fact that the programme could be upgraded to 'AA-', its maximum achievable rating, provided that the 18% contractual overcollateralisation (OC) Fitch gives credit to would be able to withstand stresses above the current 'A+' rating.
This results in a three-notch recovery uplift for BCP's and CGD's OH, and a two-notch uplift for CEMG
's and Totta's OH.
The upgrade reflects the remedial actions taken by CEMG
to restore its capital ratios and to accelerate the implementation of its strategic plan.
In June 2017, CEMG
completed a capital increase of EUR250 million.