• On 21 May 2013, Moody’s announced rating actions on MBIA Insurance Corp., National Public Finance Guarantee Corp., MBIA Inc. and other related entities. Because of the large number of credits across several asset classes affected by these rating actions, including Moody's-rated securities that are guaranteed or "wrapped" by these companies, ratings appearing on this website may not yet reflect current information. For current information on affected credits, please visit www.moodys.com/fig.
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Announcement:

Moody's: Credit Logement remains on review for downgrade

Global Credit Research - 06 Aug 2012

Paris, August 06, 2012 -- Moody's Investors Service today said that the Aa2 long-term issuer rating of Credit Logement (CL), its Aa3 dated subordinated debt rating and its A2 (hyb) non-cumulative capital securities rating remain on review for downgrade.

The ratings of CL had been placed on review for downgrade on 23 February 2012 following Moody's action on European banks taken on February 15, 2012, when the ratings of CL's shareholders were placed under review for downgrade. The rating agency has now concluded its review on CL's shareholders (detailed at the end of this issuer comment).

EXPOSURES TO FRENCH BANK SHAREHOLDERS AND INCREASING RISKS ON DOMESTIC HOME LOANS REMAIN THE PRIMARY FOCUS OF THE REVIEW

CL, a leading provider of guarantees for French non-mortgage backed residential loans has historically been exposed to the French banks which are its shareholders, mainly through the placement of its cash in the form of sight and term deposits. According to audited 2011 financial statements, CL had an EUR8.5 billion exposure to financial institutions at year-end 2011, most of which to its shareholders, while its regulatory Tier 1 Capital amounted to EUR5.4 billion.

Furthermore, while we consider CL maintains very strong acceptance criteria and the quality of the guaranteed loans has remained strong thus far, we believe that the French housing market, following signs of overheating, is now undergoing a slowdown which may reduce CL's financial strength, in our view. At year-end 2011, CL had outstanding guarantees of EUR224 billion against regulatory Tier 1 Capital of EUR5.4 billion (including its mutual guarantee fund).

As part of its review, Moody's will therefore assess (i) the adequacy of CL's capitalization given the risks stemming from its guaranteed loans and other asset exposures, in the context of the current economic downturn, and (ii) the extent to which the company's investment policy exposes it to the weakened credit quality of its shareholders.

Depending on our conclusions on the aforementioned elements, CL's ratings could be confirmed or downgraded by one notch or more.

RATINGS OF CL'S SHAREHOLDERS FOLLOWING CONCLUSION OF REVIEW

The rating agency has now concluded its review on CL' shareholders as follows:

- BNP Paribas (16.5% shareholder of CL): long-term debt and deposit ratings downgraded by two notches to A2 from Aa3 on 21 June 2012 (see press release "Moody's downgrades banks with global capital markets operations ")

- Societe Generale (16.5% shareholder of CL, including its stake through its subsidiary Credit du Nord, not rated): long-term debt and deposit ratings downgraded by one notch to A2 from A1 on 21 June 2012 (see press release "Moody's downgrades banks with global capital markets operations ")

- Credit Agricole S.A. (16.5% shareholder of CL): long-term debt and deposit ratings downgraded by two notches to A2 from Aa3 on 21 June 2012 (see press release "Moody's downgrades banks with global capital markets operations ")

- Le Credit Lyonnais S.A (16.5% shareholder of CL): long-term debt and deposit ratings downgraded by two notches to A2 from Aa3 on 21 June 2012 (see press release "Moody's downgrades banks with global capital markets operations ")

- Credit Mutuel /CIC (9.5% shareholder of CL): Banque Federative du Credit Mutuel, Credit Industriel et Commercial and Credit Mutuel Arkea's long-term debt and deposit ratings confirmed at Aa3 on 15 June 2012 (see press release "Moody's takes rating actions on BFCM, CIC; outlook stable")

- BPCE (8.5% shareholder of CL): long-term debt and deposit ratings of BPCE SA downgraded by two notches to A2 from Aa3 on 15 June 2012 (see press release "Moody's downgrades BPCE's long-term ratings to A2 from aa3; outlook stable ")

- Credit Foncier de France (7% shareholder of CL): long-term debt and deposit ratings downgraded by two notches to A2 from Aa3 on 15 June 2012 (see press release "Moody's downgrades BPCE's long-term ratings to A2 from aa3; outlook stable ")

- HSBC France (3% shareholder of CL): long-term debt and deposit ratings downgraded by one notch to A1 from Aa3 on 21 June 2012 (see press release "Moody's downgrades banks with global capital markets operations ").

Unless noted otherwise, data in this report is sourced from company reports and Moody's Banking Financial Metrics

Stephane Herndl
Analyst
Financial Institutions Group
Moody's France SAS
96 Boulevard Haussmann
Paris 75008
France
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

Carola Schuler
MD - Banking
Financial Institutions Group
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

Releasing Office:
Moody's France SAS
96 Boulevard Haussmann
Paris 75008
France
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

Moody's: Credit Logement remains on review for downgrade
No Related Data.

 

© 2013 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

 


CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. ("MIS") AND ITS AFFILIATES ARE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND CREDIT RATINGS AND RESEARCH PUBLICATIONS PUBLISHED BY MOODY'S ("MOODY'S PUBLICATIONS") MAY INCLUDE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY'S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY'S OPINIONS INCLUDED IN MOODY'S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS AND MOODY'S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY'S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY'S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY'S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY'S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

 


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MIS, a wholly-owned credit rating agency subsidiary of Moody's Corporation ("MCO"), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MIS have, prior to assignment of any rating, agreed to pay to MIS for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS's ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading "Shareholder Relations — Corporate Governance — Director and Shareholder Affiliation Policy."

 


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© 2013 Moody's Investors Service, Inc., Moody’s Analytics, Inc. and/or their affiliates and licensors. All rights reserved.
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