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Fitch Rates Banco Estado's Senior Unsecured Notes 'A+'

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings assigns a long-term foreign currency rating of 'A+' to Banco del Estado de Chile's (Banco Estado) USD 500 million senior notes due 2017. This issuance is made under the umbrella of the recently expanded Medium Term Notes Program of up to USD 2 billion.

The rating assigned to Banco Estado's new senior notes corresponds to the bank's long-term Issuer Default Rating (IDR) and ranks equal to other senior unsecured debt.

Banco Estado's 'A+' IDRs are driven by the extremely high probability of support from the republic of Chile (long-term IDR 'AA-' in local currency and 'A+' in foreign currency). Banco Estado is owned by the Republic of Chile, which plays an important social role and has systemic importance in terms of loans and deposits. In addition, the bank represents an important instrument of the State of Chile for developing counter cycle credit policies, increase access to banking services, support business and housing finance.

The institution follows a multi-segment and multi-product strategy, which includes among its objectives: to increase access to banking services in a sustainable way, support business and facilitate access to housing finance for the lower-income segment. Banco Estado is the third largest bank in Chile measured by loans, the first measured by deposits, and the third by branch network with a relevant geographic coverage.

Banco Estado's performance reflects lower levels of profitability than the system, moderate capital levels and credit quality assets, and strong liquidity, given its high proportion of liquid assets and important structural deposit base which favors funding stability.

The Rating Outlook on Banco Estado's IDR is Stable, which is in line with the Outlook of its parent, the Chilean government. Potential upgrades or downgrades of the bank's IDR would most likely be related to changes in the capacity and/or propensity of the Republic of Chile to provide support if necessary.

Fitch currently rates Banco Estado as follows:

--Foreign currency long-term IDR 'A+'; Outlook Stable;

--Foreign currency short-term IDR 'F1';

--Local currency long-term IDR 'AA-';

--Local currency short-term IDR 'F1';

--Viability rating 'bbb';

--Support rating '1';

--Support floor 'A+';

--Senior unsecured FC Bonds 'A+' (USD 500 million senior notes due 2020 and USD 500 million senior notes due 2022);

--Senior unsecured FC Bond Program 'A+' (USD 2 billion senior notes program).

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: please check the dates

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

--'National Ratings Criteria', Jan. 19, 2011;

--'Evaluating Corporate Governance', Dec. 13, 2011;

--'Rating Bank Regulatory Capital and Similar Securities', Dec. 15, 2011;

--'Treatment of Hybrids in Bank Capital Analysis', July 9, 2012.

Applicable Criteria and Related Research:

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686181

National Ratings Criteria

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

Evaluating Corporate Governance

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=657143

Rating Bank Regulatory Capital and Similar Securities

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=656371

Treatment of Hybrids in Bank Capital Analysis

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=682453

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Fitch Ratings
Primary Analyst
Franklin Santarelli, +1-212-908-0739
Managing Director
Fitch, Inc.
One State Street Plaza
New York, NY 10004
or
Primary Analyst (National Ratings)
Eduardo Santibanez, 56 2 499 3307
Senior Director
Fitch Chile Clasificadora de Riesgo Ltda.
Alcantara 200, of .202
Santiago, Chile
or
Secondary Analyst
Abraham Martinez, 56 2 499 3307
Senior Director
or
Committee Chairperson
Maria Rita Goncalves, +55 21 4503 2621
Senior Director
or
Media Relations:
Elizabeth Fogerty, New York, +1 212-908-0526
Email: elizabeth.fogerty@fitchratings.com

Source: Fitch Ratings