Moody’s downgrades Bantrab

Moody's Investors Service said it downgraded the long-term local and foreign currency deposit ratings of Banco de los Trabajadores (Bantrab) to B3 from B1.

The agency also downgraded the foreign currency senior debt rating of Bantrab Senior Trust (BST) to Caa1 from B1. BST is a Cayman Islands-based trust guaranteed by Bantrab.

At the same time, Moody’s downgraded Bantrab's standalone baseline credit assessment (BCA) and adjusted BCA to caa1 from b2 and its long-term counterparty risk assessment to B2(cr) from Ba3(cr).

Moody’s said the downgrade of Bantrab's baseline credit assessment to caa1 from b2 reflects increased payment risks for the bank's external obligations given its inability to secure an adequate number of alternative correspondent banking lines following the loss of all of its previous facilities in May. If the sole current facility, which has not yet been tested, does not function correctly, the bank may effectively be prevented from paying the November 2016 coupon related to BST's global bond.

The review for further downgrade will focus on Bantrab's ability to pay the November 2016 coupon on a timely manner, the agency noted.

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