AUSTRALIA, Oct. 8, 2009 (Info-Prod Research) -- Moody's Investors Service has assigned arating of Aa3 to National Australia Bank's (OOTC:NABZY) (NAB) AUD500 million 2009Stapled Securities, issued through its New York branch. The ratingoutlook is negative. The Aa3 rating is 2 notches lower than NAB's senior unsecured debt ratingof Aa1, and reflects the structure of the securities, which qualify asTier 1 capital. Key features driving the rating outcome are the fact thatinterest is subject to payment tests and non-cumulative, and in case of awinding up of NAB, rank pari passu with the bank's preference shares. The negative outlook on the Aa3 rating of the 2009 Stapled Securities isin line with that on the bank's other long-term ratings, and reflects theongoing impact of the global financial crisis on asset quality andearnings. The rating for the 2009 Stapled Securities was assigned in line withMoody's existing methodology entitled "Guidelines for Rating Bank JuniorSecurities", dated April 2007. Moody's noted that it has subsequentlyreleased a Request for Comment entitled "Moody's Proposed Changes to BankSubordinated Capital Ratings" in June 2009, in which the rating agencyhas requested market feedback on potential changes to its ratingmethodology for bank junior securities, such as NAB's 2009 StapledSecurities. Should the revised methodology be implemented as proposed,the rating on NAB's 2009 Stapled Securities could potentially benegatively affected. The last rating action on NAB was to revise its outlook to negative fromstable on 1 August 2008. Additionally, Moody's commented on 12 May 2009that there was no impact on NAB's ratings from the downgrade of its UKsubsidiary Clydesdale Bank, and on 23 June 2009 that there was no ratingimpact from NAB's purchase of Aviva Australia Holdings' wealth managementbusiness. Moody's Investors Service is a publisher of rating opinions and research.It is not involved in the offering or sale of any securities, nor is itacting on behalf of the offering party. This is not a solicitation or arecommendation to buy, hold or sell securities. National Australia Bank is headquartered in Melbourne, Victoria,Australia and reported total assets of AUD676 billion (approximatelyUSD541 billion) at end March 2009.