Moody’s downgraded long-term debt of Société Générale and Crédit Agricole, while keeping BNP Paribas on review; SocGen and Credit Agricole are also remaining on review over long-term funding.
The top lines from each statement follow.
Further to the review initiated on 15 June 2011
Paris, September 14, 2011 — Moody’s Investors Service has announced an extension of its review of the standalone Bank Financial Strength Rating (BFSR) and long-term debt and deposit ratings of BNP Paribas (BNPP), originally announced on 15 June, 2011.
In the meantime, the rating agency has concluded that
(i) BNPP’s profitability and capital base currently provide an adequate cushion to support its Greek, Portuguese, and Irish exposures, and
(ii) its long-term debt and deposit ratings are appropriately positioned two notches above BNPP’s standalone financial strength to reflect the likelihood it will receive systemic support from governmental authorities if needed.
However, Moody’s announced that it will extend its review for downgrade of BNPP’s B- BFSR and Aa2 long-term debt and deposit ratings to consider the implications of the potentially persistent fragility in the bank financing markets, given BNPP’s continued reliance on wholesale funding.
The review is unlikely to lead to a downgrade in the long-term ratings of more than one notch.
The Prime-1 short-term ratings have been affirmed.
Rating Action: Moody’s downgrades long-term ratings to Aa3 on normalised systemic support, Outlook negative, BFSR remains on review to consider impact of funding challenges on credit profile
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Further to the review initiated on 15 June, 2011
Paris, September 14, 2011 — Moody’s Investors Service has announced an extension of its review of the C+ standalone Bank Financial Strength Rating (BFSR) of Societe Generale SA (SocGen), equivalent to a standalone Baseline Credit Assessment (BCA) of A2 on the long-term ratings scale, originally announced on 15 June, 2011. While Moody’s concluded that SocGen’s capital base currently provides an adequate cushion to support its Greek, Portuguese, and Irish exposures, Moody’s announced that it will extend its review for downgrade of the C+ BFSR to consider the implications of the potentially persistent fragility in the bank financing markets, given its continued reliance on wholesale funding.
As announced in our press release of 15 June 2011, however, Moody’s review also encompassed a re-consideration of systemic support assumptions factored into SocGen’s long-term debt and deposit ratings under our Joint-Default Approach (JDA). Moody’s has today concluded this aspect of the review by downgrading SocGen’s debt and deposit ratings by one notch to Aa3 from Aa2. The outlook on the long-term debt ratings is negative. Moody’s anticipates that the impact of our review on the BFSR would be limited to a one-notch downgrade, which would not in itself impact the long-term ratings given our revised support assumptions for SocGen, which anticipate increased uplift at a lower standalone rating level. However, a conclusion with a negative outlook on the BFSR would lead to a renewed negative outlook on the long-term ratings. Given this possibility, we are maintaining our negative outlook on the long-term ratings during the review of the BFSR.
Further to the review initiated on 15 June, 2011
Paris, September 14, 2011 — Moody’s Investors Service has announced:
(i) A downgrade of the Bank Financial Strength Rating (BFSR) of Credit Agricole SA (CASA) by one notch to C from C+, and
(ii) A downgrade of the long-term debt and deposit ratings by one notch to Aa2 from Aa1.
Moody’s believes these ratings are more consistent with the bank’s sizeable exposures to the Greek economy.
At the same time, Moody’s announced that CASA’s C BFSR and Aa2 long-term debt and deposit ratings remain on review for possible downgrade to consider the implications of the potentially persistent fragility in the bank financing markets, given the continued reliance on wholesale funding of Groupe Credit Agricole (GCA).
The review is unlikely to lead to a downgrade in the long-term ratings of more than one notch.
The Prime-1 short-term ratings have been affirmed.
Meanwhile, the Aa3 long-term debt and deposit ratings on Credit Agricole Corporate and Investment Bank remain on review, now direction uncertain (previously on review for downgrade), as they may be aligned with the ratings on CASA following the potential extension of full cooperative support from GCA to this entity.