S&P cuts three Colombian institutions

S&P said it lowered Banco Davivienda SA and two government-owned lenders Financiera de Desarrollo Nacional SA and Financiera de Desarrollo Territorial SA to BB+ from BBB-. S&P also trimmed the issue-level rating on Financiera de Desarrollo Territorial’s senior unsecured notes to BB+ from BBB-.

The downgrade follows S&P’s lowering of Colombia’s rating to BB+ from BBB-, the agency said.

“The downgrade of the two government-owned banks reflects their economic roles and very important links to the government. Similarly, the ratings on the sovereign cap those on Banco Davivienda, given its large exposure to country risk and the highly sensitive nature of its businesses to sovereign stress. Finally, the rating actions don't reflect a deterioration in the entities' stand-alone credit profiles (SACPs),” the agency said in a press release.

The outlook on the three institutions is stable.

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