S&P lowers Banco Popular, debt

S&P said it lowered its long-term counterparty credit rating on Banco Popular Espanol SA to B from B+ and affirmed the B short-term rating.

The outlook is negative.

The agency also downgraded its issue ratings on Banco Popular's nondeferrable subordinated debt to CCC- from CCC+ and its preference shares to CC from CCC.

S&P said the action follows Banco Popular's April 3 announcement that it will undertake additional provisions and regulatory capital adjustments that will be reflected in its first-half 2017 financial statements.

This will lower its total capital ratio to 11.7%-11.85% according to the bank's estimates, compared to 12.33% on Jan. 1, and its 11.375% supervisory review and evaluation process (SREP) requirement.

“We estimate that such adjustments will result in Banco Popular operating with a risk-adjusted capital (RAC) ratio of 4.75%-5.0% by end-2017. As a result, we now assess Banco Popular's capital position as weak instead of moderate,” S&P said in a news release.

This led the agency to revise the bank's stand-alone credit profile to b from b+ and its issuer credit rating to B from B+.

© 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.