MOODY'S DOWNGRADES TO A1 AND B- FROM Aa2 AND B+ THE SENIOR RATINGS AND FSR OF UNICREDITO ITALIANO AFTER SUCCESSFUL BID FOR HYPOVEREINSBANK (HVB)
Long-term deposit rating of HVB upgraded to A2 from A3, long-term deposit rating of Bank Austria Creditanstalt (BA-CA) confirmed at A2; B- financial strength rating of BA-CA confirmed but outlook changed to negative from stable
London, 03 November 2005 -- Moody's Investors Service has downgraded to A1 from Aa2 the long-term
senior debt and deposit ratings of Unicredito Italiano (Unicredito),
and to B- from B+ its financial strength rating, following
the announcement that its bid to acquire Bayerische Hypo- und Vereinsbank
(HVB) has been successful. The outlook for both ratings is stable.
At the same time Moody's has upgraded to A2 from A3 the long-term
senior debt and deposit ratings of HVB, which in line with its new
parent now also carry a stable outlook. The D+ financial strength
rating of HVB is unaffected by these rating actions and continues to have
a negative outlook.
The rating agency also confirmed at A2 with a stable outlook the long-term
debt and deposit ratings of Bank Austria Creditanstalt (BA-CA --
a subsidiary of HVB), and at B- the financial strength rating
of BA-CA. The outlook for BA-CA's financial
strength rating has however been changed to negative from stable.
The ratings of the three banks' subsidiaries, and notably
for their respective subordinated liabilities and hybrid securities,
will be changed accordingly.
Moody's has also downgraded to A1 from Aa2 the long-term issuer
rating of Locat, Unicredito's leasing subsidiary in Italy,
whose ratings reflect support from Unicredito.
According to Moody's the downgrade of Unicredito's ratings
reflects the strategic challenges of delivering strong synergies from
the acquisition in the German market, and the group's increased
risk profile. The rating agency noted in particular the still weak
financial fundamentals of HVB, as reflected in the bank's
D+ financial strength rating and ongoing negative outlook.
Moody's also noted that although Unicredito's Tier 1 capital
ratio will fall significantly as a result of the acquisition, it
expects that this will soon be restored to a higher level both through
internal capital generation and a number of other actions aimed at achieving
this. With regard to the upgrade of HVB's long-term
deposit rating to A2 from A3 Moody's said that this reflects the
expectation of support for HVB from Unicredito, given the strategic
nature of this acquisition. The outlook for the D+ FSR remains
negative as in the expected new group structure HVB will probably no longer
have access to the attractive earnings stream emanating from Central and
Eastern Europe and the more predictable results coming from Austria.
Although Moody's acknowledges the progress HVB has made in its home
market, it believes that substantial further improvements will be
necessary to strengthen its commercial and financial profile once it will
have become a purely domestic bank in the German market.
Moody's added that the decision to confirm BA-CA's
A2 long-term deposit rating and to change the outlook to negative
from stable for the bank's B- FSR reflects both the bank's
position within the Unicredito group as much as its intrinsic credit profile,
and notably the possibility that BA-CA's valuable activities
in central and eastern Europe may be repositioned elsewhere in the group
so that the Austrian bank would no longer benefit from the attractive
earnings stream and growth potential in these markets. In this
context, Moody's cautioned that BA-CA's domestic
operations may not sufficiently underpin its current FSR.
The proposed acquisition of HVB's Polish subsidiary BPH has not
yet received approval from Polish banking regulators, and the bank's
A3 long-term deposit rating and P-2 short-term deposit
ratings remain on review for possible upgrade. The rating agency
added that any future changes in the structure of the group's activities
in Central and Eastern Europe could affect the ratings of these banks.
The following ratings were downgraded:
Unicredito Italiano SpA: long-term debt and deposits to A1
from Aa2; subordinated debt to A2 from Aa3; junior subordinated
debt to A2 from Aa3, Tier 3 debt to A3 from A1; bank financial
strength to B- from B+
Unicredito Italiano Capital Trust I: preferred stock to A3 from
A1
Unicredito Italiano Capital Trust II: preferred stock to A3 from
A1
Unicredito Italiano Bank (Ireland) plc: backed long-term
senior debt to A1 from Aa2
Unicredito Italiano Spa (Paris Branch): long-term deposits
to A1 from Aa2
Unicredit Luxembourg Finance SA: backed long-term senior
debt to A1 from Aa2; backed subordinated debt to A2 from Aa3;
backed Tier III debt to A3 from A1
Locat SpA: long-term issuer rating to A1 from Aa2.
The following ratings were confirmed:
Bank Austria Creditanstalt: long-term senior debt and deposit
ratings at A2
Bank Austria Creditanstalt AG: financial strength rating at B-
BA-CA Finance (Cayman Island) 2 Ltd: preferred stock at Baa1
BA-CA Finance (Cayman Island) Ltd: preferred stock at Baa1
The following ratings were upgraded:
Bayerische Hypo- und Vereinsbank: long-term senior
debt and deposit ratings to A2 from A3
HypoVereinsbank Overseas Finance N.V.: Long-term
debt to A2 from A3
HypoVereins Finance N.V.: Long-term debt to
A2 from A3
Bayerische Vereinsbank A.G., Paris Branch: Long-term
debt and deposit rating to A2 from A3
HVB Banque Luxembourg S.A.: Long-term debt
to A2 from A3
HVB Funding Trust: Preferred stock to Baa2 from Baa3
HVB Funding Trust II: Preferred stock to Baa2 from Baa3
HVB Funding Trust III: Preferred stock to Baa2 from Baa3
HVB Funding Trust V: Preferred stock to Baa2 from Baa3
HVB Funding Trust VII: Preferred stock to Baa2 from Baa3
HVB Funding Trust VIII: Preferred stock to Baa2 from Baa3
Bayerische Hypo-Und Vereinsbank, Hong Kong: Long-term
debt to A2 from A3
Bayerische Hypo-und Vereinsbank Singapore: Long-term
debt to A2 from A3
The ratings of the following principal Central and Eastern European subsidiaries
of Unicredito and of Bank Austria were affected as follows:
Poland's Bank Pekao SA: A2/P-1 long-term and short-term
deposit ratings affirmed; C financial strength rating also affirmed
Poland's Bank BPH: A3 long-term deposit and P-2 short-term
deposit ratings remain on review for possible upgrade; A3 secured
medium-term notes issued by BPH Finance PLC remain on review for
possible upgrade; C- (stableoutlook) financial strength rating
affirmed
Czech Republic's Zivnostenska Banka: A1 long-term deposit
rating downgraded to A2 from A1; P-1 short term deposit rating
and D financial strength rating affirmed
Slovakia's Unibanka, a.s.: A2/P-1 long-term
and short-term deposit ratings affirmed; D financial strength
rating also affirmed. Outlook on the A2 long-term deposit
rating changed to stable from developing.
- Unicredito Italiano is headquartered in Milan, Italy.
At December 2004 it had total assets of EUR265 billion.
- Locat S.p.A. is headquartered in Milan,
Italy. At December 2004 it had total assets of EUR12.3 billion.
- Bayerische Hypo- und Vereinsbank is headquartered in Munich,
Germany. At December 2004 it had total assets of EUR467.4
billion.
- Bank Austria Creditanstalt is headquartered in Vienna,
Austria. At December 2004 it had total assets of EUR146.5
billion.
- Bank Pekao SA is headquartered in Warsaw, Poland.
At December 2004 it had total assets of PLN59.3 billion (EUR14.5
billion).
- Bank BPH SA is headquartered in Cracow, Poland.
At December 2004 it had total assets of PLN53.9 billion (EUR13.2
billion).
- Zivnostenska Banka is headquartered in Prague, Czech Republic.
At December 2004 it had total assets of CZK46.5 billion (EUR1.5
billion).
- Unibanka, a.s. is headquartered in Bratislava,
Slovakia. At December 2004 it had total assets of SKK49.1
billion (EUR1.3 billion).
London
Antonio Carballo
Managing Director
Financial Institutions Group
Moody's Investors Service Ltd.
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
Milan
Henry MacNevin
General Manager
Financial Institutions Group
Moody's Investors Service
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454