By k on September 24, 2009

Sydney, September 24, 2009 -- Moody's Investors Service has assigned a
rating of Aa3 to National Australia Bank's (NAB) USD600 million Perpetual
Capital Notes, issued through its New York branch. The rating outlook is
negative.

"The Aa3 rating is 2 notches lower than NAB's senior unsecured debt
rating of Aa1, and reflects the structure of the securities, which
qualify as Tier 1 capital", said Patrick Winsbury, a Senior Vice
President with Moody's Sydney office. "Key features driving the rating
outcome are the fact that interest is subject to payment tests and
non-cumulative, and in case of a winding up of NAB, the amount owing to a
Perpetual Capital Note holder would be equal to the amount it would have
received if it had held an issued and fully paid preference share."

The negative outlook on the Aa3 rating of the Perpetual Capital Notes is
in line with that on the bank's other long-term ratings, and reflects the
ongoing impact of the global financial crisis on asset quality and
earnings.

The rating for the Perpetual Capital Notes was assigned in line with
Moody's existing methodology entitled "Guidelines for Rating Bank Junior
Securities", dated April 2007. Moody's noted that it has subsequently
released a Request for Comment entitled "Moody's Proposed Changes to Bank
Subordinated Capital Ratings" in June 2009, in which the rating agency
has requested market feedback on potential changes to its rating
methodology for bank junior securities, such as NAB's Perpetual Capital
Notes. Should the revised methodology be implemented as proposed, the
rating on NAB's Perpetual Capital Notes could potentially be negatively
affected.

The last rating action on NAB was to revise its outlook to negative from
stable on 1 August 2008. Additionally, Moody's commented on 12 May 2009
that there was no impact on NAB's ratings from the downgrade of its UK
subsidiary Clydesdale Bank, and on 23 June 2009 that there was no rating
impact from NAB's purchase of Aviva Australia Holdings' wealth management
business.

Related posts:

1. Moody’s assigns Backed-Aaa to Kiwibank’s A$250mln Fixed Rate Notes Notes Sydney, October 16, 2009 -- Moody's Investors Service has assigned...
2. Moody’s assigns Baa2 rating to Toshiba’s domestic unsecured bond JPY20 billion of debt affected Tokyo, September 03, 2009 -- Moody's Investors Service has assigned...

Related posts brought to you by Yet Another Related Posts Plugin.

Readers Comments