MOODY'S REVIEWS CREDIT RATINGS OF ING BANK FOR POSSIBLE DOWNGRADE.
New York, 03-06-95 -- Moody's Investors Service placed the long-term ratings of International Nederlanden Bank N.V. (ING Bank), Aa2 for its deposits and senior debt, and Aa3 for its subordinated debt, under review for possible downgrade. The bank's short-term rating of Prime-1, and the Prime-1 commercial paper rating of Internationale Nederlanden U.S. Insurance Holdings, Inc. (guaranteed by ING group's insurance subsidiary Internationale Nederlanden Verzekeringen N.V.) were confirmed. Moody's said that its review was prompted by the announcement that ING group had agreed to buy substantially all of the businesses of Barings plc, the recently failed London-based merchant bank, which suffered huge losses from derivatives trading in its Singapore operations.
Moody's said that its review will examine the risks assumed by ING in this transaction, as well as the value of the assets and liabilities to be assumed by ING group, and the effect of their consolidation on the capital structure of ING Bank. The agency noted, however, that the immediate cost to ING (the group is planning to inject an amount of œ660 million to recapitalise Barings) is small in relation to the overall size of the ING group, which has total capital funds equivalent to around œ8 billion at current exchange rates. Moody's said that the review will also assess ING management's ability to control its rapidly expanding range of banking businesses, and its strategy for integrating Barings' trading and merchant banking activities with ING Bank.
The following ratings were placed on review for possible downgrade:
International Nederlanden Bank N.V.: the rating of the bank for its long-term deposits and senior debt of Aa2, and the Aa3 rating of its subordinated long-term debt.
The following ratings were confirmed:
International Nederlanden Bank N.V.: the rating of the bank for its short-term deposits and for its commercial paper of Prime-1.
Internationale Nederlanden (U.S.) Funding Corporation: the Prime-1 rating of the company for its commercial paper guaranteed by Internationale Nederlanden Bank N.V.
Internationale Nederlanden U.S. Insurance Holdings, Inc.: the Prime-1 rating of the company for its commercial paper guaranteed by Internationale Nederlanden Verzekeringen N.V.
International Nederlanden Group, headquartered in Amsterdam, the Netherlands, was formed in 1991 by the merger of Nationale Nederlanden, the biggest insurance company in the Netherlands, with NMB Postbank, the third-largest Dutch bank. The group's total assets at end-June 1994 were Dfl 349 billion: equivalent to approximately US$ 212 billion at current exchange rates.
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