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Moody's lowers Co-Operative Bank to Caa2
Moody's Investors Service said it downgraded Co-Operative Bank plc's senior unsecured debt and deposit ratings by one notch to Caa2 and maintained the negative outlook on the ratings.
The bank's standalone bank financial strength rating was affirmed at E, which is equivalent to a baseline credit assessment of ca. The bank financial strength rating has a stable outlook and the short-term ratings are unaffected.
Moody's said the downgrade reflects its opinion of a reduced likelihood of systemic support coming from the UK authorities in the event that additional capital is required for the Co-operative Bank; any further capital needs would need to be raised from either existing shareholders or in the market, but Moody's believes there is a much reduced likelihood that the UK government would commit taxpayer's money to inject capital into the bank if this was required in the future, as the bank's ongoing deleveraging process is leading to a smaller and less systemically important financial institution.
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