Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

Terms of One-Time Website Use

1.            Unless you have entered into an express written contract with Moody’s to the contrary, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.               

2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

3.            To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.

4.            You agree to read [and be bound by] the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.     

5.            You agree that any disputes relating to this agreement or your use of the Information, whether sounding in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​

I AGREE
Rating Action:

Moody's downgrades BBK to Baa1 from A1 due to Cajasur acquisition

04 Jan 2011

Debt and deposit ratings remain on review for possible further downgrade following sovereign's rating review

Madrid, January 04, 2011 -- Moody's Investors Service has today downgraded the senior debt and deposits ratings of Bilbao Bizkaia Kutxa (BBK) to Baa1 from A1, and its Bank Financial Strength Rating (BFSR) to D+ from C+. The D+ standalone BSFR maps to a Ba1 rating on the long-term scale. At the same time, dated subordinated debt was downgraded to Baa2 from A2, and the short-term rating to Prime-2 from Prime-1. All of BBK's debt ratings that benefit from a rating uplift due to systemic support from the Spanish government remain on review for possible downgrade, subsequent to Moody's decision on 15 December 2010 to place the Kingdom of Spain's Aa1 bond rating on review for possible downgrade. The savings bank's BFSR, which is not affected by the review, has a negative outlook.

These rating actions conclude Moody's rating review initiated on 21 July 2010 when BBK proposed the acquisition of Cajasur (not publicly rated), the Cordoba-based Spanish savings bank which had been put under the administration of Spain's fund for orderly bank restructuring (the 'Fondo de Restructuración Ordenada Bancaria' or FROB) in May 2010.

The integration is effective since 1 January 2011. All of the assets and liabilities of Cajasur have been assumed by BBK Bank, a fully consolidated subsidiary 100% owned by BBK. Cajasur has ceased to exist following the completion of the integration on 1 January.

RATINGS RATIONALE

DOWNGRADE OF BBK'S BFSR

Moody's decision to downgrade BBK's standalone ratings, the BFSR, by several notches from C+ to D+ is driven by the rating agency's concern that the integration of Cajasur has significantly weakened the combined entity's financial strength: i) the capital levels of the combined group are significantly lower than of BBK before the merger; ii) in return for winning the bidding process for Cajasur, BBK has taken on the asset risk of Cajasur without significant recapitalisation or indemnification by the Spanish government against further asset quality deterioration at Cajasur, a strategy which has notably raised the risk profile of BBK for the short to medium term future; iii) the challenge for BBK's management to integrate a failed, but nevertheless quite sizeable bank in the middle of a very challenging operating environment.

BBK has only received EUR392 million capital injections from the Spanish government fund "FROB" (Fund for the Orderly Restructuring of the Banking System; and Moody's cautions that the funds provided may not be sufficient to compensate for the incremental expected losses in the combined entity's risk assets according to Moody's own scenario analyses.

In addition, BBK has had to repay EUR800 million to the FROB late in 2010, which had been initially provided by the FROB in the form of preference shares to restore Cajasur's capital ratios at the time of the FROB's intervention as these ratios were well below the minimum regulatory thresholds.

Moody's acknowledges that BBK displayed strong financial fundamentals prior to the integration of Cajasur, as reflected by BBK's Tier 1 ratio of 15.6% as of June 2010 (one of the strongest in the Spanish banking system) and sound asset quality indicators at end-September 2010 (a problem loan (PL) ratio of 2.6% well below the system's average of 5.5%, as well as PL coverage by loan-loss reserves exceeding 100% and above the 60% average for the system). However, the relative size of Cajasur -- with total assets of EUR17 billion in September 2010 compared with BBK at EUR29 billion -- together with its very weak financial fundamentals, makes this quite a substantial acquisition that has significantly altered the credit profile of BBK. The impact of the integration is reflected by the significant decline in BBK's Tier 1 capital ratio, which will fall to 9.5% from the above mentioned 15.6%.

Moody's notes that Cajasur's very weak financial fundamentals are caused by: (i) Very weak capital levels, albeit favourably impacted at the time of the bailout by the FROB's EUR800 million capital injection (as a result the Tier 1 ratio increased to 7.3% as of end-June 2010 from 3.7% at FY2009), which, nonetheless, have been repaid by BBK at end 2010; (ii) reported net losses of EUR950 million (as of September 2010), largely driven by the almost EUR1 billion allocated to provisions; (iii) a very high PL ratio of 17.4% as at September 2010; and (iv) the loan portfolio's sizeable exposure to the real estate sector(27% for Cajasur compared to 11% for BBK before the integration).

The new entity will benefit from cost savings that will arise from the restructuring plan that has been approved by BBK, which includes a reduction of Cajasur's workforce and a number of branch closures. In addition, BBK will allocate further resources in addition to the EUR392 million provided by the FROB in anticipation of the losses that may arise from Cajasur's loan and securities portfolio. Moody's also notes that the fiscal credits -- deriving from the losses that Cajasur reported in 2009 and 2010 -- that will be activated at integration, will help to mitigate the negative impact that the integration will have on the risk absorption capacity of BBK.

Moody's assigned a negative outlook to BBK's BFSR, reflecting the negative pressures on BBK's standalone creditworthiness stemming from the execution risks associated with Cajasur's integration as well as its vulnerability to further asset quality and earnings pressure stemming from the operating environment.

DOWNGRADE OF BBK'S SENIOR DEBT AND DEPOSIT RATINGS, AND SUBORDINATED DEBT

The downgrade of BBK's senior debt and deposit ratings follows the downgrade of the savings bank's standalone BFSR. BBK's rating of Baa1/Prime-2 incorporates Moody's assumption of ongoing exceptional systemic support. In this respect, Moody's believes that the Spanish government is generally both willing and able to support its banking system and the new entity in particular, as and when required.

The downgrade of BBK's dated subordinated debt instruments is driven by the same factors considered in Moody's downgrade of the senior unsecured debt. These dated subordinated debt instruments continue to be rated one notch lower than the senior debt instruments based on subordination in the case of liquidation.

BBK's debt and deposit ratings and dated subordinated debt remain on review for possible further downgrade, aligned with other 30 Spanish banks that were placed on review for possible downgrade on 20 December 2010 and subsequent to Moody's decision on 15 December 2010 to place the Kingdom of Spain's Aa1 bond rating on review for possible downgrade. In this respect, debt ratings that benefit from uplift due to systemic support may be negatively affected by either a weakening in the sovereign's creditworthiness; or a potential reduction in the likelihood that the Spanish government will support Spanish banks in case of need, although Moody's believes that the government maintains a strong incentive to continue to provide support within its capacity.

POTENTIAL TRIGGERS FOR AN UPGRADE/DOWNGRADE

An upgrade of BBK's ratings is currently unlikely given the negative outlook on its BFSR and the review for possible further downgrade of the debt and deposit ratings. Any upward pressure on the BFSR would depend on stronger capital adequacy levels, further offsetting estimated credit losses under Moody's anticipated scenario and a lower transition risk to a more severe scenario.

Downward pressure would be exerted on BBK's rating as a result of: (i) greater-than-expected deterioration in the new entity's risk absorption capacity, beyond the estimations assumed in Moody's stress tests; and/or (ii) deterioration of the savings bank's sound liquidity position.

The principal methodologies used in rating Bilbao Bizkaia Kutxa were "Bank Financial Strength Ratings: Global Methodology", published in February 2007, "Incorporation of Joint-Default Analysis into Moody's Bank Ratings: A Refined Methodology", published in March 2007, and "Moody's Guidelines for Rating Bank Hybrid Securities and Subordinated Debt", published in November 2009. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found on Moody's website.

Headquartered in Bilbao, Spain, BBK reported total consolidated assets of EUR29 billion as of 30 September 2010.

Headquartered in Cordoba, Spain, Cajasur reported total consolidated assets of EUR17 billion as of 30 September 2010.

The combined entity will be headquartered in Bilbao and will have combined assets of EUR46 billion.

REGULATORY DISCLOSURES

Information sources used to prepare the credit rating are the following: parties involved in the ratings, public information.

Moody's Investors Service considers the quality of information available on the issuer or obligation satisfactory for the purposes of assigning a credit rating.

The rating has been disclosed to the rated entity or its designated agents and issued with no amendment resulting from that disclosure.

Moody's Investors Service may have provided Ancillary or Other Permissible Service(s) to the rated entity or its related third parties within the three years preceding the Credit Rating Action. Please see the ratings disclosure page www.moodys.com/disclosures on our website for further information.

Moody's adopts all necessary measures so that the information it uses in assigning a credit rating 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.

Please see ratings tab on the issuer/entity page on Moodys.com for the last rating action and the rating history.

The date on which some Credit Ratings were first released goes back to a time before Moody's Investors Service's Credit Ratings were fully digitized and accurate data may not be available. Consequently, Moody's Investors Service 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 the Credit Policy page on Moodys.com for the methodologies used in determining ratings, further information on the meaning of each rating category and the definition of default and recovery.

Madrid
Maria Jose Mori
Vice President - Senior Analyst
Financial Institutions Group
Moody's Investors Service Espana, S.A.
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

London
Johannes Wassenberg
MD - Banking
Financial Institutions Group
Moody's Investors Service Ltd.
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

Moody's Investors Service Espana, S.A.
Barbara de Braganza, 2
Madrid 28004
Spain
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

Moody's downgrades BBK to Baa1 from A1 due to Cajasur acquisition
No Related Data.
© 2018 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating 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 or in preparing the Moody’s publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be reckless and inappropriate for retail investors to use MOODY’S credit ratings or publications when making an investment decision. If in doubt you should contact your financial or other professional adviser.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for appraisal and rating services rendered by it fees ranging from JPY200,000 to approximately JPY350,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.