Fitch Ratings has assigned Bank of China Limited's (BOC, A/Stable/bbb) senior unsecured notes issued by BOC (Dubai) Branch under its USD40 billion medium-term note (MTN) programme a final rating of 'A'.

The USD300 million 4.75% notes due 2025 will be used for general corporate purposes. The final rating on the notes is in line with the expected rating assigned on 27 Nov 2022, and follows the receipt of documents conforming to information previously received.

Key Rating Drivers

BOC (Dubai) Branch is part of the same legal entity as BOC. Therefore, the notes represent BOC's direct, unconditional, unsecured and unsubordinated obligations and they are rated in line with its Long-Term Issuer Default Rating (IDR).

BOC's IDR is underpinned by the agency's expectations of a very high probability of support from the Chinese sovereign (A+/Stable) in the event of stress.

Rating Sensitivities

Factors that could, individually or collectively, lead to negative rating action/downgrade:

The rating on the notes would be downgraded if BOC's Long-Term IDR is downgraded.

Factors that could, individually or collectively, lead to positive rating action/upgrade:

The rating on the notes would be upgraded if BOC's Long-Term IDR is upgraded.

Best/Worst Case Rating Scenario

International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit https://www.fitchratings.com/site/re/10111579

Date of Relevant Committee

21 November 2022

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

Public Ratings with Credit Linkage to other ratings

The ratings on the notes issued by BOC (Dubai) Branch are equalised with BOC's Long-Term IDR.

ESG Considerations

BOC has an ESG Relevance Score of '4' for Financial Transparency as there are still structural issues around financial transparency and disclosure. Those are not captured in headline performance metrics in China and affect our assessment on the OE as well as the financial profile. This negatively affects the bank's credit profile and is relevant to the rating in conjunction with other factors.

Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg

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