S&P downgrades KBC Group

Standard & Poor’s said it lowered to BBB+ the long-term counterparty credit rating on KBC Group NV, the non-operating holding company of the KBC Bank NV group.

S&P also said it affirmed the A-2 short-term counterparty credit rating on the group.

The outlook is stable.

The A and A-1 ratings on KBC Bank, the group’s main operating bank, are unaffected.

The group has declared its preferred debt-resolution strategy that makes KBC Group the key vehicle for absorbing losses, whether on a going-concern or non-viability basis.

For this reason, the agency said it decided to downgrade the holding company’s rating.

Regulatory authorities haven’t yet communicated their views on the group’s final resolution plan, but the agency said it believes the designation of the holding company as the resolution entity for the group is the most likely solution.

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