Moody’s acts on Tunisian banks

Moody's Investors Service said it downgraded the long-term local currency deposit ratings of Arab Tunisian Bank, Banque Internationale Arabe de Tunisie and Banque de Tunisie to B2 from B1, as well as the long-term local currency deposit ratings of Societe Tunisienne de Banque to B3 from B2, and affirmed the long-term local currency deposit rating of Amen Bank at B2.

The banks' short-term deposit ratings were affirmed at Not-Prime.

Moody's also changed the outlook on the long-term deposit ratings of all five banks to stable from negative.

At the same time, the agency downgraded the baseline credit assessments of Arab Tunisian Bank and Banque de Tunisie to b3 from b2 and affirmed the BCAs of Amen at caa1, Banque Internationale Arabe at b3 and STB at caa3.

Also, the adjusted BCA of Arab Tunisian Bank was downgraded to b2 from b1 and Banque de Tunisie’s adjusted BCA downgraded to b3 from b2.

Furthermore, Moody's downgraded the long-term foreign currency deposit ratings of all banks to B3 from B2, the same level as the country ceiling for foreign currency deposits.

Lastly, the agency downgraded the long-term counterparty risk assessment of Arab Tunisian Bank to B1(cr) from Ba3(cr) and the counterparty risk assessments of the four other Tunisian banks to B2(cr) from B1(cr).

Moody’s said the action followings its March 14 downgrade of the Tunisian government's issuer rating to B2 stable from B1 negative. The sovereign action primarily reflects further erosion in fiscal strength and foreign exchange reserve buffers which the agency said it expects will not reverse in the next few years.

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