Moody's cuts Societe Generale hybrids

Moody's Investors Service said it downgraded Societe Generale's junior subordinated debt with cumulative deferral features to A3 from Aa3 and non-cumulative preferred securities to Baa2 from A1. This concludes the review for possible downgrade that began in November and is in line with Moody's revised guidelines for rating bank hybrids and subordinated debt published in November 2009.

All other ratings remain unchanged.

The outlook remains negative.

Prior to the global financial crisis, Moody's said it incorporated into its ratings an assumption that support provided by national governments and central banks to shore up a troubled bank would benefit the subordinated debt holders as well as the senior creditors.

The systemic support for these instruments has not been forthcoming in many cases, the agency said, so the agency revised its methodology.

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