Moody's downgrades Oesterreichische Volksbanken

Moody's Investors Service said it downgraded the issuer rating and senior debt rating of Oesterreichische Volksbanken AG (VBAG) to Ba3 from Ba1 and confirmed its subordinated and senior subordinated debt at Caa2. Moody's also downgraded the senior debt ratings of VBAG's former subsidiary, Investkredit Bank AG, to Ba3 from Ba1 and confirmed its subordinated and senior subordinated debt at Caa2. This concludes the review that began March 27, and the outlook is negative.

The agency said VBAG’s ratings now include four notches of support, which is down from six notches previously, and reflect the implications of Moody's reassessment of the support environment in Austria for VBAG.

The negative outlook reflects continued pressure on the bank's capitalization, Moody’s said.

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