Madrid, October 24, 2012 -- Moody's Investors Service has today taken a range of actions on
the ratings of 31 Spanish banking groups. These actions follow
the confirmation of the Spanish government debt rating, which had
previously been on review for downgrade (see Moody's press release
of 16 October 2012 http://www.moodys.com/research/Moodys-confirms-Spains-government-bond-rating-at-Baa3PP-3-assigns--PR_257500).
Some actions additionally reflect bank-specific drivers,
namely (1) increased clarity about merger processes; and (2) heightened
vulnerability to the stressed operating environment.
The Spanish bank ratings affected by today's actions fall into five
groups:
- Rating reviews resolved following the confirmation of the Spanish
government rating
- Rating reviews resolved reflecting the sovereign confirmation
and enhanced clarity about planned mergers
- Ratings that remain on review reflecting continuing uncertainty
related to planned mergers
- Ratings that remain on review for downgrade reflecting bank-specific
factors
- Ratings directly tied to the Spanish government rating as a result
of a guarantee or direct ownership
Separately, Moody's has today downgraded the ratings of Liberbank,
following the break-up of its planned merger with Ibercaja (see
today's press release "Moody's downgrades Liberbank
to Ba3, maintains review for downgrade of Ibercaja Banco,
following merger break-up").
Moody's has also today published a press release discussing the
rating rationale for Spanish banks involved in merger processes ("Moody's
confirms ratings of Caixabank, La Caixa, Banco Sabadell and
Banco CAM, maintains other banks on review").
This press release discusses the key drivers of today's actions
for all affected banks other than those involved in mergers and Liberbank
and Ibercaja Banco, which are covered by the two separate press
releases referenced above.
For a full list of all affected ratings, click here: http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_146671
. This list is an integral part of this release.
For additional information on bank ratings, please refer to the
webpage containing Moody's related announcements http://www.moodys.com/eusovereign
RATINGS RATIONALE
I RATING REVIEWS RESOLVED REFLECTING THE CONFIRMATION OF THE SPANISH GOVERNMENT
RATING
The ratings of banks in this group had previously been on review for downgrade
because of their potential sensitivity to a further sovereign downgrade.
Moody's has confirmed these ratings following the confirmation of
the Spanish government's rating. Banks in this group are
(ordered by ratings):
- Banco Santander, SA (senior long-term rating Baa2,
outlook negative; standalone bank financial strength rating C-
/ baseline credit assessment baa2, outlook negative)
o Santander Consumer Finance, SA (Baa2 negative, C-/baa2
negative)
o Banco Espanol de Credito (Baa3 negative, D/ba2 negative)
- Banco Bilbao Vizcaya Argentaria, SA (Baa3 negative,
D+/baa3 negative)
- Caja Rural de Navarra, SCC (Baa3 negative, D+/baa3
negative)
- Bankinter, SA (Ba1 negative, D+/ba1 negative)
- Kutxabank, SA (Ba1 negative, D/ba2 negative)
- Bankoa, SA (Ba1 negative, D-/ba3 negative)
- Caja Rural de Granada, SCC (Ba2 negative, D/ba2 negative)
- Cajamar Caja Rural, SCC (Ba3 negative, D-/ba3
negative)
- Dexia Sabadell, SA (B2 negative, E/caa1 stable)
II RATING REVIEWS RESOLVED REFLECTING THE SOVEREIGN CONFIRMATION AND ENHANCED
CLARITY ABOUT PLANNED MERGERS
The ratings of banks in this group had been on review because of sovereign
risks and also because of uncertainties related to merger processes they
are involved in. The confirmation of the Spanish government's
rating and increased clarity about mergers allowed Moody's to resolve
the rating reviews for these banks, as discussed in more detail
in today's separate press release ("Moody's confirms
ratings of Caixabank, La Caixa, Banco Sabadell and Banco CAM,
maintains other banks on review"). The merger processes that
these banks are involved in are far advanced, Moody's has
received sufficient information about the credit profile of the combined
entities and the status of the merger processes, and there is a
degree of clarity about the impact of the government's bank restructuring
and recapitalisation initiative for these banks.
The outlooks on the debt and deposit ratings of these institutions are
negative. The standalone credit assessments also carry negative
outlooks, except for Banco CAM whose standalone credit assessment
Moody's has placed on review for upgrade. The rationale for
the ratings and outlooks of these banks is discussed in more detail in
today's separate press release ("Moody's confirms ratings
of Caixabank, La Caixa, Banco Sabadell and Banco CAM,
maintains other banks on review").
A list of the banks in this group and their respective ratings follows:
- La Caixa (Ba2 negative)
o CaixaBank (Baa3 negative, D+/ba1 negative)
- Banco Sabadell, SA (Ba1 negative, D/ba2 negative)
- Banco CAM, SA (Ba1 negative, E+/b3 on review
for upgrade)
III RATINGS THAT REMAIN ON REVIEW REFLECTING CONTINUING UNCERTAINTY RELATED
TO PLANNED MERGERS
A number of banks remain on review for downgrade (and in one case direction
uncertain) reflecting continued uncertainty associated with planned mergers
and the credit profile of the merged entities, as well as (in the
case of Banco Popular) execution risks associated with its planned capital
raise. The rating rationale for these institutions is also discussed
in today's separate press release ("Moody's confirms
ratings of Caixabank, La Caixa, Banco Sabadell and Banco CAM,
maintains other banks on review"). Those banks are:
- Caja Laboral (Baa3 on review for downgrade, D+/baa3
on review for downgrade)
- Banco Popular Español, SA (Ba1 on review for downgrade,
D/ba2 on review for downgrade)
- Unicaja Banco, SA (Ba1 on review for downgrade, D/ba2
on review for downgrade)
- Banco CEISS (B1 on review, direction uncertain, E+/b2
on review, direction uncertain)
IV RATINGS THAT REMAIN ON REVIEW REFLECTING BANK-SPECIFIC FACTORS
The final group comprises banks that remain on review for idiosyncratic
reasons and Moody's has not taken any actions on these ratings today.
The confirmation of the Spanish government's rating has removed
one aspect of the ongoing rating reviews for banks in this group.
However, bank-specific concerns primarily relating to the
highly-stressed operating environment have prompted Moody's
to maintain the ratings for these banks on review for downgrade.
This group comprises:
- Banca March, SA (Baa3 on review for downgrade, D+/baa3
on review for downgrade)
- Banco Cooperativo Español, SA (Ba1 on review for
downgrade, D+/ba1 on review for downgrade)
- Confederación Española de Cajas de Ahorro (CECA)
(Ba1 on review for downgrade, D/ba2 on review for downgrade)
- Ibercaja Banco (Ba2 on review for downgrade, D-/ba3
on review for downgrade)
- Ahorro Corporacion Financiera SV, SA (Ba3 on review for
downgrade)
- Lico Leasing, SA, EFC (Ba3 on review for downgrade)
- Liberbank (Ba3 on review for downgrade, E/caa1 on review
for downgrade)
- Catalunya Banc, SA (B1 on review for downgrade, E+/b2
on review for downgrade)
- NCG Banco, SA (B1 on review for downgrade, E+/b2
on review for downgrade)
- Banco Financiero y de Ahorros (BFA, B2 on review,
direction uncertain)
o Bankia (Ba2 on review, direction uncertain, E+/b2 on
review, direction uncertain)
The planned merger of Liberbank and Ibercaja has been terminated.
The rating rationale for these institutions is discussed in today's
separate press release.
V RATINGS DIRECTLY TIED TO THE SPANISH GOVERNMENT RATING AS A RESULT OF
A GUARANTEE OR DIRECT OWNERSHIP
Following the confirmation of the Spanish government's bond rating,
Moody's has also confirmed at Baa3, with a negative outlook,
the backed senior debt of 18 institutions. The backed-Baa3
ratings assigned are based on the unconditional guarantee, which
directly links these ratings to the Spanish government.
Furthermore, Moody's has today confirmed at Baa3, with a negative
outlook, its ratings for all debt issued by government-owned
Instituto de Credito Oficial. Its liabilities are explicitly,
irrevocably, directly and unconditionally guaranteed by the government
of Spain.
SENIOR LONG-TERM RATINGS -- SUPPORT ASSUMPTIONS UNCHANGED
Moody's support assumptions for Spanish banks remain unchanged (again
with the exception of Liberbank, as discussed in today's separate
press release). This reflects the rating agency's assessment
that the capacity and willingness of the Spanish government to support
banks, if needed, is unchanged.
RATING OUTLOOKS NEGATIVE -- RISKS REMAIN WEIGHED TOWARDS
DOWNSIDE
For those banks whose rating reviews Moody's has resolved today,
the agency has assigned a negative outlook on both their standalone credit
assessments and their long-term ratings. The negative outlooks
on the standalone credit assessments reflect the above-mentioned
challenges that Spanish banks still face. The negative outlooks
on the long-term ratings reflect those same challenges, and
additionally the diminished, but still-present downside risks
to the Spanish sovereign's creditworthiness. Those downside
risks are reflected in the negative outlook on the Baa3 government bond
rating.
WHAT COULD MOVE THE RATINGS UP/DOWN
Downwards pressure on the banks' ratings might develop if operating conditions
worsen beyond Moody's current expectations, i.e. a
broader economic recession beyond our current GDP decline forecasts of
-1.7% for 2012 and -1% for 2013;
especially given that this is likely to result in asset-quality
deterioration exceeding Moody's current expectations; and/or if pressures
on market-funding intensify.
Upwards pressure on the ratings may arise upon the successful implementation
of the government's plan to stabilise the banking system, to the
extent that banks' resilience to the challenging prevailing conditions
improve. Likewise, any improvement in the standalone strength
of banks arising from stronger earnings, improved funding conditions
or the work-out of asset-quality challenges could result
in rating upgrades.
RESEARCH REFERENCES
- Moody's confirms Spain's government bond rating at Baa3/(P)P-3,
assigns negative outlook (http://www.moodys.com/research/Moodys-confirms-Spains-government-bond-rating-at-Baa3PP-3-assigns--PR_257500),
16 Oct 2012
- Moody's takes actions on 4 Spanish banking groups due to
restructuring framework (http://www.moodys.com/research/Moodys-takes-actions-on-4-Spanish-banking-groups-due-to--PR_255526),
5 Oct 2012
- Sector Comment: Spanish Banks' Upcoming Recapitalization
Is Credit Positive, but May Be Insufficient (http://www.moodys.com/research/Spanish-Banks-Upcoming-Recapitalization-Is-Credit-Positive-but-May-Be--PBC_145834),
1 Oct 2012
- Banking System Outlook: Spain (http://www.moodys.com/research/Banking-System-Outlook-Spain--PBC_144617),
17 Aug 2012
- Moody's downgrades Spanish banks (http://www.moodys.com/research/Moodys-downgrades-Spanish-banks--PR_249316),
25 Jun 2012
- How Sovereign Credit Quality May Affect Other Ratings (http://www.moodys.com/research/How-Sovereign-Credit-Quality-May-Affect-Other-Ratings--PBC_139495),
13 Feb 2012
- Moody's to assign backed Aaa ratings to new euro-denominated
long-term debt securities covered by Spanish government's guarantee
(http://www.moodys.com/research/Moodys-to-assign-backed-Aaa-ratings-to-new-euro-denominated--PR_171216),
22 January 2009
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings, except Ahorro Corporacion
Financiera was Moody's Consolidated Global Bank Rating Methodology published
in June 2012. Please see the Credit Policy page on www.moodys.com
for a copy of this methodology.
The principal methodologies used in rating Instituto de Credito Oficial
were Moody's Consolidated Global Bank Rating Methodology published in
June 2012, and Government-Related Issuers: Methodology
Update published in July 2010. Please see the Credit Policy page
on www.moodys.com for a copy of these methodologies.
The principal methodologies used in rating Lico Leasing were Moody's Consolidated
Global Bank Rating Methodology published in June 2012, and Finance
Company Global Rating Methodology published in March 2012. Please
see the Credit Policy page on www.moodys.com for a copy
of these methodologies.
The principal methodology used in rating Ahorro Corporacion Financiera
was Global Securities Industry Methodology published in December 2006.
Please see the Credit Policy page on www.moodys.com for
a copy of this methodology.
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.
Ratings for the Medium-Term Note Program issued by Banca March
S.A. were initiated by Moody's and were not requested by
this rated entity.
Rated entity Banca March S.A or its agent(s) participated in the
rating process. This rated entity or its agent(s), if any,
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
agent(s) and issued with no amendment resulting from that disclosure.
Information sources used to prepare each of 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.
.
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.
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 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.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Maria?Cabanyes
Senior Vice President
Financial Institutions Group
Moody's Investors Service Espana, S.A.
Calle Principe de Vergara, 131, 6 Planta
Madrid 28002
Spain
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
Johannes Wassenberg
MD - Banking
Financial Institutions Group
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
Releasing Office:
Moody's Investors Service Espana, S.A.
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Spain
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Moody's concludes rating reviews on majority of Spanish banks after sovereign rating confirmation
