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Announcement:

Moody's changes outlook on 17 German banking groups to negative following outlook change on German sovereign and sub-sovereigns

Global Credit Research - 25 Jul 2012

Frankfurt am Main, July 25, 2012 -- Moody's Investors Service has today changed to negative the outlooks of 17 German banking groups and several subsidiaries long-term debt and deposit ratings or their long-term guaranteed debt obligations, whose ratings incorporate support from the German government and/or several German federal states or municipalities. Today's action follows Moody's decision to change the outlooks on the German sovereign and sub-sovereign ratings to negative from stable, as announced on 23 and 24 July, respectively.

The actions announced today are as follows:

(i) The outlook of several banks' senior unsecured and subordinated debt instruments that are guaranteed by either the German government or by German federal states or municipalities have been changed to negative from stable to capture Moody's revised outlook on the creditworthiness of the respective guarantor.

(ii) The outlook on Kreditanstalt fuer Wiederaufbau's (KfW) Aaa long-term senior debt and deposit ratings was changed to negative from stable, reflecting Moody's assessment of the weakened credit profile of the Government of Germany, the guarantee provider of the bank. As a result, the rating agency also changed the outlook on the Aa3 long-term ratings of its subsidiary KfW Ipex to negative from stable.

(iii) The outlook on several other government-related issuers (GRI) have been changed to negative from stable to capture Moody's change in the outlook for the creditworthiness of the respective owners.

(iv) The outlook on EAA Covered Bond Bank plc's (EAA CBB) Aa1 long-term deposit ratings was changed to negative from stable in line with the outlook for EAA CBB's parent and guarantee provider Erste Abwicklungsanstalt (EAA) (Aa1, negative; P-1).

For full details on Moody's actions on German sovereign and sub-sovereign ratings on 23 and 24 July 2012, please refer to:

Rating Action Government of Germany: http://www.moodys.com/research/Moodys-changes-the-outlook-to-negative-on-Germany-Netherlands-Luxembourg--PR_251214

Rating Action German sub-sovereign: http://www.moodys.com/research/Moodys-changes-outlook-to-negative-on-German-and-Dutch-sub--PR_250882

Please click on this link http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_144054 for the List of Affected Credit Ratings. This list is an integral part of this press release and identifies each affected issuer. All other ratings, including the short-term ratings of the listed banks remain unaffected by this rating action.

For additional information on Sovereign ratings, please refer to the webpage containing Moody's related announcements http://www.moodys.com/eusovereign.

RATINGS RATIONALE

-- Debt instruments guaranteed by the German government, by German federal states, or municipalities

Grandfathered securities. Following the end of statutory guarantees -- as a result of an agreement between the EU Commission and the German government in 2001 -- Moody's ratings for state-guaranteed senior unsecured and subordinated debt in Germany are derived from the creditworthiness of the guarantors, i.e., the respective German federal state or municipality and the maturity of the respective debt instrument:

(i) Until their respective maturity if issued on or before 18 July 2001

(ii) Until 31 December 2015 if issued between 18 July 2001 and before 18 July 2005

As a result, the changes to the creditworthiness of the guarantor have direct implications for the grandfathered securities.

Government-guaranteed securities. During the financial crisis, the German government provided liquidity guarantees in 2008-10 to financial institutions that allowed them to issue bonds with maturities of up to five years. The outlook on the Aaa backed senior unsecured debt ratings of IKB was changed to negative from stable, reflecting Moody's assessment of the weakened credit profile of the Government of Germany (Aaa negative), the guarantee provider.

-- Kreditanstalt fuer Wiederaufbau (KfW) and KfW IPEX-Bank GmbH (IPEX-Bank)

The outlook on the Aaa senior debt and deposit ratings of KfW was changed to negative from stable, reflecting Moody's assessment of the weakened credit profile of the Government of Germany (Aaa negative), which provides an explicit and unconditional guarantee for KfW's liabilities. The outlook on the Aa3 senior debt and deposit ratings of IPEX-Bank was changed to negative from stable, reflecting the negative outlook of its parent and support provider KfW.

-- GRIs

Moody's rates four development banks in Germany as GRIs, and hence their ratings are aligned with their owner and support provider. As a result, the outlook on the long-term ratings of L-Bank (Aaa), Landwirtschaftliche Rentenbank (Aaa), LfA Foerderbank Bayern (Aaa) and NRW.BANK (Aa1) was changed to negative from stable.

Deutsche Siedlungs- und Landesrentenbank (DSL) is a former GRI that benefited from a statutory guarantee from the German government until 1999 when it was sold to and subsequently merged into Deutsche Postbank AG (A2; D+ / ba1 stable) which is a majority owned subsidiary of Deutsche Bank AG (A2, C- / baa2 stable). The securities issued until 1999 continue to benefit from this guarantee and are therefore rated in line with the German government. The outlook on their Aaa rating was lowered to negative from stable, in line with the revised outlook on the German government bond ratings.

-- EAA Covered Bond Bank (EAA CBB)

Moody's changed the outlook on the Aa1 long-term deposit ratings of EAA CBB to negative from stable, in line with the outlook on the Aa1 rating of EAA, the wind-down vehicle for assets of Portigon AG (former WestLB, A3 on review for downgrade/Prime-2), managed by the German Financial Market Stabilisation Authority (FMSA) and supported by Portigon's current public-sector owners, in particular the state of North-Rhine Westphalia (rated Aa1 negative). EAA CBB was a subsidiary of Portigon / WestLB until 30 April 2010, when EAA took it over as a wholly-owned subsidiary. EAA CBB benefits from a blanket guarantee from EAA, which makes EAA irrevocably and unconditionally the principal obligor of all EAA CBB's obligations.

WHAT COULD MOVE THE RATINGS UP/DOWN

Moody's believes that upward pressure on ratings affected by today's actions is unlikely to develop in view of weakened sovereign and sub-sovereign credit profiles.

Downward pressure on the affected debts would be prompted by further deterioration of the creditworthiness of the sovereign and the respective sub-sovereigns.

PRINCIPAL METHODOLOGIES

The methodologies used in these ratings were Moody's Consolidated Global Bank Rating Methodology published in June 2012 and Government-Related Issuers: Methodology published in July, 2010. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

The ratings of rated entity Landesbank Saar were initiated by Moody's and were not requested by this rated entity.

Rated entity Landesbank Saar or its agents participated in the rating process. This rated entity or it's agents provided Moody's access to the books, records and other relevant internal documents of the rated entity.

The ratings have been disclosed to the rated entities or their designated agents and issued with no amendment resulting from that disclosure.

Information sources used to prepare the ratings are the following : parties involved in the ratings, public information, and confidential and proprietary Moody's Investors Service information.

Moody's considers the quality of information available on the rated entities, obligations or credits satisfactory for the purposes of issuing these ratings.

Moody's adopts all necessary measures so that the information it uses in assigning the ratings is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Moody's Investors Service may have provided Ancillary or Other Permissible Service(s) to the rated entities or their related third parties within the two years preceding the credit rating action. Please see the special report "Ancillary or other permissible services provided to entities rated by MIS's EU credit rating agencies" on the ratings disclosure page on our website www.moodys.com for further information.

Please see the ratings disclosure page on www.moodys.com for general disclosure on potential conflicts of interests.

Please see the ratings disclosure page on www.moodys.com for information on (A) MCO's major shareholders (above 5%) and for (B) further information regarding certain affiliations that may exist between directors of MCO and rated entities as well as (C) the names of entities that hold ratings from MIS that have also publicly reported to the SEC an ownership interest in MCO of more than 5%. A member of the board of directors of this rated entity may also be a member of the board of directors of a shareholder of Moody's Corporation; however, Moody's has not independently verified this matter.

Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.

Please see for each issuer the ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history. The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

The below contact information is provided for information purposes only. Please see the issuer page on www.moodys.com for Moody's regulatory disclosure of the name of the lead analyst and the office that has issued the credit rating.

The relevant Releasing Office for each rating is identified under the Debt/Tranche List section on the Ratings tab of each issuer/entity page on moodys.com

Mathias?Kuelpmann
Senior Vice President
Financial Institutions Group
Moody's Deutschland GmbH
An der Welle 5
Frankfurt am Main 60322
Germany
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 Deutschland GmbH
An der Welle 5
Frankfurt am Main 60322
Germany
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

Moody's changes outlook on 17 German banking groups to negative following outlook change on German sovereign and sub-sovereigns
No Related Data.
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