KBRA Assigns Senior Unsecured Debt Rating of BBB+ for PacWest Bancorp
NEW YORK--(BUSINESS WIRE)--Nov 13, 2018--Kroll Bond Rating Agency (KBRA) assigns a senior unsecured debt rating of BBB+, subordinated debt rating of BBB, and short-term debt rating of K2 for Los Angeles, California based PacWest Bancorp (NASDAQ: PACW) (“PacWest” or “the Company”). In addition, KBRA assigns deposit and senior unsecured debt ratings of A-, a subordinated debt rating of BBB+, and short-term deposit and debt ratings of K2 for its subsidiary, Pacific Western Bank (“PWB”). The Outlook for all long-term ratings is Stable.
The ratings are supported by PACW’s consistently strong profitability post-crisis, driven by the Company’s above-peer risk-adjusted margin, stable credit quality, and favorable efficiency metrics gained, in part, through acquisitions. The Company benefits from a comparatively strong core deposit funding base and diversified loan book, owing to its national platform businesses and solid market share in its California markets. The ratings also benefit from the Company’s solid core capital levels as well as the strength and expertise of PACW’s management team. The ratings are primarily constrained by PACW’s potentially elevated credit risk profile, particularly when viewed in conjunction with the Company’s poor financial performance through the financial crisis. In this regard, both PacWest and CapitalSource (a national middle market lending platform acquired in 2014 with operations conducted through PWB) incurred large credit-driven losses. With that said, KBRA considers the Company’s current risk management infrastructure and capabilities favorably and does not expect similar performance thorough the next credit downturn. Also limiting the ratings is PACW’s reliance upon spread revenue, noting that a sizable portion of fees are derivative of loan and lease volumes.
The ratings are based on KBRA’s published on February 19, 2016.
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KBRA is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus, is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.
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M Scott Durant, Director
Ian Jaffe, Managing Director
KEYWORD: UNITED STATES NORTH AMERICA NEW YORK
INDUSTRY KEYWORD: PROFESSIONAL SERVICES BANKING FINANCE INSURANCE
SOURCE: Kroll Bond Rating Agency
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PUB: 11/13/2018 09:54 AM/DISC: 11/13/2018 09:53 AM