Moody's continues Banque PSA review

Moody's Investors Service said it maintained the review for downgrade on Banque PSA Finance's Baa3 and Prime-3 senior unsecured long-term and short-term debt and deposit ratings, pending finalization of the state support plan for the bank and European Commission approval, as well as the conclusion of the review of Banque PSA's D+ bank financial strength rating related to Moody's ongoing rating reviews on European car financiers.

At the same time, the rating agency has taken the following actions:

• Banque PSA's D+ bank financial strength rating was remapped to Ba1 from Baa3 to reflect the weakening of Banque PSA's risk profile as a result of the downgrade of its parent Peugeot SA. The bank financial strength rating remains on review for downgrade;

• Banque PSA's provisional subordinated and Tier 3 debt programs were downgraded to provisional Ba2 from provisional Ba1 and the junior subordinated debt programs to provisional Ba3 from provisional Ba2 as a result of the lowering of Banque PSA's standalone credit assessment to D+/Ba1 from which these ratings are notched. In line with the bank financial strength rating, these ratings remain on review for downgrade; and,

• Banque PSA's long-term and short-term senior unsecured debt and deposit ratings were held at Baa3 and Prime-3, respectively, notwithstanding the reduction in the standalone credit assessment, pending the completion of the ongoing review of those ratings and following the announcement that the French government proposed a support package for Banque PSA which may offset the downward pressures on the bank's standalone risk profile.

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