Fitch Rates Hilltop's Senior Issuance 'BBB'

NEW YORK--(BUSINESS WIRE)-- Fitch assigns a new rating of 'BBB' to Hilltop Holdings Inc.'s (Hilltop) planned $125 million senior unsecured debt issuance maturing April 2025.

Hilltop intends to use the net proceeds of the offering to redeem all of its Non-Cumulative Perpetual Preferred Stock series B at an aggregate liquidation value of $114.1 million, plus accrued but unpaid dividends, and the remainder for general corporate purposes. Any redemption of such preferred stock will be subject to any necessary approvals of governmental agencies. If Hilltop does not use the net proceeds immediately, it will temporarily invest them in short-term, interest-bearing obligations. In the event that the necessary approvals are not received, the proceeds will be used for general corporate purposes

KEY RATING DRIVERS - SENIOR DEBT

The rating for Hilltop's senior debt is aligned with Hilltop's long-term Issuer Default Rating (IDR) of 'BBB'.

Hilltop's ratings are derived from Hilltop's experienced and consistent management team, diverse business model, solid capital position, and historically stable operating performance at its core subsidiary, PlainsCapital Bank. Fitch believes Hilltop's ratings are constrained by a heavy reliance on income generated from mortgage banking and a weak liquidity profile relative to Fitch-rated community bank peers.

RATING SENSITIVITIES - SENIOR DEBT

Hilltop's senior debt rating is sensitive to changes in the long-term IDR of the company in accordance with Fitch's rating criteria. Alternatively, the senior debt rating could be notched down if were deep effective subordination or high balance sheet encumbrance.

Hilltop's ratings were published on Jan. 13, 2015. Please see 'Fitch Publishes Hilltop Holdings Inc.'s 'BBB/F2' IDRs; Outlook Stable' for more details.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--Global Financial Institutions Rating Criteria (Jan. 31, 2014).

Applicable Criteria and Related Research:

Global Financial Institutions Rating Criteria - Effective from 31 January 2014 to 20 March 2015

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=732397

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=982499

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Fitch Ratings, , New York
Media Relations
Alyssa Castelli, +1-212-908-0540
[email protected]
Elizabeth Fogerty, +1-212-908 0526
[email protected]
or
Primary Analyst
Senior Director
Doriana Gamboa, +1-212-908-0865
or
Fitch Ratings, Inc.
33 Whitehall St.
New York, NY 10004
or
Secondary Analyst
Associate Director
Jawad Sozer, +1-312-606-2315
or
Committee Chairperson
Managing Director
Christopher Wolfe, +1-212-908-0771

Source: Fitch Ratings

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