Moody's affirms Allgemeine Hypothekenbank

Moody's Investors Service said it downgraded to E from D- the financial strength rating of Germany's Allgemeine Hypothekenbank Rheinboden AG.

The unsecured long- and short-term ratings of Baa3 and P-3 were affirmed with a negative outlook.

The Ba1 rating for subordinated debt was put under review for possible downgrade.

Moody's said that the downgrade reflect the uncertainties with respect to Allgemeine following the agreement of its shareholders BHW and BGAG to transfer their shareholdings to a newly formed company. BHW is being acquired by Deutsche Postbank AG under the condition that it is fully separated from any risks associated with Allgemeine.

Moody's said that the downgrade of the bank's financial strength rating reflects both its weak financial fundamentals and its dependence on external support.

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