Moody’s downgrades Banco Mercantil, debt

Moody's Investors Service said it downgraded the long-term local- and foreign-currency deposit ratings of Banco Mercantil do Brasil SA to B3 from B2.

The agency also downgraded Banco Mercantil’s long-term Brazilian national scale deposit rating to B1.br from Ba2.br, long-term foreign currency senior unsecured medium-term note program to provisional B3 from provisional B2 and long-term foreign currency subordinated debt rating to Caa1 from B3.

At the same time, Moody's downgraded the baseline credit assessment and adjusted baseline credit assessment to b3 from b2, and its long-term counterparty risk assessment (CRA) to B2(cr) from B1(cr).

All short-term ratings and assessments assigned to Banco Mercantil were affirmed.

The outlook is negative.

Moody’s said the downgrades reflect Banco Mercantil's persistent weak adjusted levels of capitalization, high asset risk and declining liquidity. The bank continues to report high delinquency ratios, which reflect the poor quality of a loan book centered on small and medium-sized companies (SMEs) that has been highly vulnerable to the slow economic activity of the past years.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.