Fitch cuts Council of Europe Development Bank

Fitch Ratings said it downgraded Council of Europe Development Bank's long-term foreign-currency issuer default rating to AA+ from AAA and removed it from Rating Watch negative.

The outlook for the long-term issuer default rating is stable.

The short-term issuer default rating was affirmed at F1+. The agency placed the bank on watch Dec. 19, 2011 and maintained the watch in June.

The downgrade reflects weaker capitalization compared to peers together with a weakening of the bank's asset quality due to the multi-notch downgrades of several borrowing countries in the European Union in 2012, in particular Spain (BBB/negative), Italy (A-/negative) and Cyprus (BB+/negative), according to the agency.

Risk management constitutes a key rating strength for the bank, the agency said, with capital adequacy, liquidity and credit risk carefully monitored through a prudent risk-management framework, based on self-imposed prudential ratios and limits.

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