Moody's cuts Shinsei

Moody's Japan K.K. said it downgraded Shinsei Bank Ltd.'s bank financial strength rating to D- from D+, its base line credit assessments to Ba3 from Ba1, the long-term senior unsecured and deposit ratings to Baa3 from Baa1, the bank's senior subordinated debt to Ba1 from Baa2, its junior subordinated debt to Ba2 from Baa3 and the non-cumulative tier 1 preferred securities issued by its subsidiaries to B3 from B1.

Moody's also downgraded the bank's short-term deposit rating to P-3 from P-2.

The outlook for the bank financial strength and the non-cumulative tier 1 preferreds ratings is negative, while the bank's supported ratings is stable.

The downgrades reflect the view that due to the bank's limited franchise as wells as the severe operating environment for the consumer finance industry, the bank's fundamental credit profile will continue to face challenges stabilizing earnings and executing its management plan, Moody's said.

On the other hand, the bank's deposit ratings, senior unsecured ratings, as well as the senior and junior subordinated ratings reflect the continuing high likelihood of systemic support being provided to the bank in the event of stress, the agency said.

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