Moody’s cuts Yes Bank

Moody’s Investors Service said it downgraded Yes Bank Ltd.’s long-term foreign currency issuer rating to B2 from Ba3.

The downgrade considers the bank’s pool of potential stressed assets and low-loss absorbing buffers against those assets – will add pressure to its funding and liquidity, creating additional risks to its standalone credit profile, Moody’s said.

Moody’s said it expects Yes Bank’s common equity tier 1 ratio of 8.7% at the end of September to come under significant pressure, unless the bank can raise new capital in the next few quarters.

Several financial investors have offered to invest up to $2 billion through new equity capital into the bank. Nevertheless, Moody’s said there are significant execution risks around the timing, price and regulatory approvals required.

The outlook is negative.

S&P rates National Australia notes BBB-

S&P said it has assigned its BBB- issue credit ratings to National Australia Bank Ltd.’s proposed additional tier 1 capital notes.

“We rate NAB’s AT1 capital notes four notches below NAB’s stand-alone credit profile (SACP) of a. The starting point of the SACP reflects our view that it is unlikely that the Australian government’s support for NAB and other Australian banks – if needed – would extend to hybrid capital instruments issued by the banks,” S&P said in a press release.

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