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
