S&P Affirms BBV's Iissuer Rtgs, Lwrs Pref. Share Rtgs.

PARIS--(BUSINESS WIRE)--Standard & Poor's CreditWire 10/15/98-- Standard & Poor's today affirmed its double-'A'-minus long-term and 'A-1'-plus short-term issuer credit ratings of Banco Bilbao Vizcaya, S.A. (BBV).

The outlook remains negative. At the same time, Standard & Poor's downgraded to single-'A'-minus from single-'A' the long-term rating on BBV's preferred share issues. The Spanish central bank links Spanish banks' payment of preferred dividends to the existence of distributable profits from the previous year. Standard & Poor's views this earnings test as evidence that there is stricter treatment in Spain than in other countries with respect to preferred shares' potential to absorb losses. Thus, the payment default risk is somewhat higher on Spanish bank preferred shares and leads to a wider gap between a Spanish bank's issuer credit rating and its preferred share rating. BBV is increasingly using this source of funding. Standard & Poor's believes that the growing proportion of the bank's earnings that originate in Latin America increases the potential for volatility in net profits and, at the same time, the risk of nonpayment of preferred stock dividends.

BBV's issuer credit ratings balance the increased risk of recent expansion in Latin America with its excellent domestic franchise and solid financial profile. BBV maintains a strong and diversified position in the Spanish banking system and sound capitalization, while its asset quality and profitability are satisfactory.

In the past three years, through joint ventures with local partners, BBV has acquired leading banks in seven Latin American countries, resulting in a total investment after goodwill amortization of about US$2.4 billion, equivalent to approximately 30% of the bank's adjusted total equity. Latin American assets and earnings now figure prominently in the bank's credit profile. BBV's Latin American subsidiaries, excluding recent acquisitions in Brazil and Chile, account for about one-quarter of group loans outstanding and one-third of operating income.

Over the past three years, BBV has consolidated its already strong position in all the main segments of the Spanish banking market. The bank has improved profitability and strengthened its balance sheet to a level that compares well with other international banks. Growth in commissions and efficiency gains have contributed positively to group profits. BBV has taken advantage of the past two years' good results (including the capital gains realized in its industrial portfolio), to amortize goodwill generated by its acquisitions and to cover future contingencies, especially in Latin America. The bank's sound financial performance has given it a solid basis for expansion. OUTLOOK: NEGATIVE BBV's growing activities in Latin America expose it to increasing economic instability in the region. Standard & Poor's will closely follow unfolding events in Latin America, the progress of BBV's acquisitions, and its effects on the bank's credit profile. Any unforeseen problems in the acquired banks or any further exposure to emerging markets will have a negative impact on the ratings. The outlook assumes that BBV will continue to enjoy higher-than-average capital ratios, and that asset quality and profitability will remain satisfactory, Standard & Poor's said. -- CreditWire ISSUER CREDIT RATINGS AFFIRMED Banco Bilbao Vizcaya S.A. -0-

RATINGS

   Counterparty rating                       AA-/Negative/A-1+
   Senior unsecured                          AA-
   Certificates of deposit                   A-1+
   Commercial paper                          A-1+
   Subordinated debt                         A+

BBV International Finance Ltd.
(GTD: Banco Bilbao Vizcaya S.A.)

   Senior unsecured                          AA-
   Subordinated debt                         A+

BBV Finance (DE) Inc.
(GTD: Banco Bilbao Vizcaya S.A.)

   Commercial paper                          A-1+
Bilbao Vizcaya Investments B.V.
(GTD: Banco Bilbao Vizcaya S.A.)

   Subordinated debt                         A+

PREFERRED STOCK RATINGS DOWNGRADED
BBV Privanza International (Gibraltar) Ltd.
(GTD: Banco Bilbao Vizcaya S.A.)

                    TO        FROM
   Preferred stock            A-        A
   Preference stock           A-        A