Moody’s drops Costa Rican banks

Moody's Investors Service said it downgraded Banco de Costa Rica’s long- and short-term local and foreign currency deposit ratings to Ba1/Not Prime and Ba2/Not Prime, respectively, from Baa3/Prime-3.

The agency also downgraded the bank’s foreign currency senior debt rating to Ba1 from Baa3 and lowered its baseline credit assessment to ba1 from baa3. The D+ standalone bank financial strength rating was affirmed.

At the same time, Moody's downgraded Banco Nacional de Costa Rica’s long- and short-term local and foreign currency deposit ratings to Ba1/Not Prime and Ba2/Not Prime, respectively, from Baa3/Prime-3. The bank's foreign currency senior debt rating was also downgraded to Ba1 from Baa3, while the baseline credit assessment was maintained at ba1. The D+ bank financial strength rating was affirmed.

The outlooks were changed to stable from negative.

Moody's also downgraded the bank financial strength rating of Panama-based Banco Internacional de Costa Rica (Bicsa) to D from D+ and lowered its baseline credit assessment to ba2 from ba1. The bank's long- and short-term foreign currency deposit ratings of Ba1 and Not Prime were affirmed. The outlooks are stable. Bicsa is 51% owned by Banco de Costa Rica and 49% by Banco Nacional de Costa Rica.

These rating actions follow the Sept. 16 downgrade of Costa Rica's government bond rating to Ba1 from Baa3, with the outlook changed to stable from negative, as well as the lowering of the country ceiling for foreign currency deposits to Ba2/Not Prime from Baa3/ Prime-3.

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