Moody’s upgrades Banco Popular

Moody's Investors Service said it upgraded Banco Popular Espanol, SA's deposit ratings to A2/Prime-1 from Baa2/Prime-2.

At the same time, the agency upgraded the bank's adjusted baseline credit assessment to baa1 from ba3 and upgraded the long-term counterparty risk assessment to A3(cr) from Baa2(cr).

Banco Popular's short-term counterparty risk assessment was affirmed at Prime-2(cr).

The outlook was changed to stable from positive.

Moody’s said the action follows the announcement made by Banco Santander SA that its board of directors reached an agreement to merge by absorption its domestic subsidiary Banco Popular.

The agency said the upgrades reflect Moody's assessment of a higher probability of affiliate support coming from Banco Santander than initially incorporated.

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