Moody's downgrades Portuguese hybrids

Moody's Investors Service said it downgraded its ratings on some Portuguese hybrid securities in line with its revised guidelines for rating bank hybrids and subordinated debt. This concludes the review for possible downgrade on these ratings begun in November.

Prior to the global financial crisis, the agency had incorporated into its ratings an assumption that support provided by national governments and central banks to shore up a troubled bank would, to a large extent, benefit the subordinated debt holders as well as the senior creditors. However, during the crisis, systemic support for these instruments has not been forthcoming in many cases.

The revised methodology has therefore largely removed previous assumptions regarding systemic support, Moody's said.

The agency downgraded:

• The non-cumulative preferred securities issued by Banco BPI subsidiary BPI Capital Finance Ltd. to Ba2 from Baa1. The outlook is negative;

• Banco Comercial Portugues' perpetual subordinated securities with conditional coupons and the non-cumulative preferreds issued by subsidiary BCP Finance Co. to Ba3 from Baa1. The outlook is negative;

• Junior subordinated debt (upper tier 2) issued by Banco Espírito Santo subsidiary BES Finance Ltd. to Baa2 from A2 and its non-cumulative preferreds to Ba1 from A3. The outlook is stable;

• The non-cumulative preferreds issued by Espírito Santo Financial Group subsidiary ESFG International Ltd. to Ba2 from Baa2. The outlook is stable;

• Banco Santander Totta's junior subordinated euro medium-term note program (upper tier 2) to A3 from A1. The outlook is negative;

• Caixa Geral de Depósitos' junior subordinated debt (upper tier 2) to Baa1 from Aa3 and the non-cumulative preferreds issued by Caixa Geral Finance Ltd. to Baa3 from A1. The outlook is negative;

• Junior subordinated debt (upper tier 2) issued by Banif -- Banco Internacional do Funchal subsidiary Banif Finance Ltd. to B1 from Baa3 and the its non-cumulative preferreds to B3 from Ba1. The outlook is negative;

• Caixa Económica Montepio Geral (Montepio)'s junior subordinated euro medium-term note program (upper tier 2) to Ba3 from Baa3. The outlook is negative; and

• Banco Itaú Europa's junior subordinated euro medium-term note program (upper tier 2) to Baa3 from Baa2. The outlook is negative.

© 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.