Recipient email addresses will not be used in mailing lists or redistributed.
Use semicolon to separate each address, limit to 20 addresses.
characters you see
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
Don't want to see this again?
Accept our to continue to Moodys.com:
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 information 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
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.
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
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.
Global Credit Research - 04 May 2010
Downgrade follows Special Comment "Assessing Post-Crisis Support for German Banks"
Frankfurt, May 04, 2010 -- Moody's Investors Service has today downgraded the senior unsecured debt
and deposit ratings of HSH Nordbank AG to A3 from A2 and its subordinated
debt ratings to Baa1 from A3 following Moody's revisions of the
support assumptions that are factored into these ratings. Concurrently,
the bank's Prime-1 short-term rating was confirmed.
Today's rating action concludes the review for possible downgrade
that Moody's initiated for these ratings on 21 December 2009.
Furthermore, Moody's affirmed the bank's E+ bank
financial strength rating (BFSR, which maps directly to a B1 baseline
credit assessment, BCA) and its developing outlook. HSH Nordbank's
hybrid ratings and the Aa1 rating for obligations that qualify for the
grandfathering of "Gewaehrtraegerhaftung" (a guarantee obligation) remained
unaffected by today's rating action.
DOWNGRADE OF HSH'S LONG-TERM RATINGS DUE TO WEAKENING SUPPORT
FROM PUBLIC SECTOR SHAREHOLDERS
"Today's rating action follows a review of the probability
of future support for HSH Nordbank from the federal state of Schleswig-Holstein
and the city state of Hamburg, which together hold 85.5%
of the bank's equity," says Katharina Barten,
a Vice President at Moody's in Frankfurt and lead analyst for HSH
Nordbank. "The extent of past support measures represent
such a burden to the two states' own financial strength that they
will be less inclined to offer further support to the bank, should
this become necessary", Ms. Barten adds. "Nonetheless,
Moody's assumptions of future support from the main owners of HSH
Nordbank remain factored into the bank's ratings , albeit
at a lower level in recognition of the two states' continued responsibility
for, and commercially-driven interest in, the bank's
The rating agency emphasises the importance of the bank's role as
a lender to Germany's northern region as well as to the global shipping
industry. Moreover, Moody's notes that external pressures
on the two states to further support HSH also remain high, even
though this would inevitably came at a high political price -- along
with further increase in leverage -- for the regional / local governments
(RLGs). An important aspect in assessing the states' further
availability to offer support measures, according to the rating
agency, is the large amount of grandfathered debt (approximately
EUR50 billion) that currently remains on HSH's balance sheet and
represents a contingent liability of the bank's owners.
At the same time, Moody's factored into HSH Nordbank's
fully supported ratings a slightly lower probability of cooperative support
and a higher probability of support from the German government (i.e.
systemic support) which, in the rating agency's view,
better reflects the most important future sources and availability of
external assistance for the bank. "The adjustments to Moody's
support assumptions reflect that the regional savings banks of Schleswig
Holstein did not contribute to the recent support measures for HSH,
but also the government's availability -- as shown in the case
of WestLB -- to support systemically important Landesbanks once other
sources have been exhausted," Ms. Barten explains.
"This offsetting effect has resulted in the relatively mild downgrade
of just one notch to A3 for HSH's senior unsecured debt ratings."
Although the rating uplift from its B1 BCA was lowered from eight to seven
notches, this nevertheless still implies Moody's expectation
of very high support going forward.
Moody's decision should be viewed in the context of its recent analysis
of changing support in Germany, as outlined in the Special Comment
"Assessing Post-Crisis Support for German Banks".
In this report Moody's points out that weakening support from public
sector owners -- among other factors -- exerts pressure on several
supported Landesbank ratings, while uncertainties for junior classes
of debt are rising across the banking landscape. While the latter
have not yet been factored into any German bank ratings -- whose
subordinated debt ratings generally remain one notch below senior unsecured
debt -- today's rating action reflects Moody's concern
about gradually weakening support for banks that needed large-scale
support during the crisis and have not yet demonstrated a sufficient financial
recovery and stabilisation that would allow for a (material) upgrade in
NEGATIVE OUTLOOK ON THE A3 RATINGS REFLECTS RISK OF FURTHER WEAKENING
SUPPORT OVER LONG TERM
Moody's believes that, in a post-crisis situation with more
normal market conditions and a potentially better-capitalised banking
system, individual banks in distress may be less likely to receive
support than in the past. This could ultimately generate downward
rating pressure, unless banks are able to offset this anticipated
reduction in (systemic) support by strengthening their levels of stand-alone
financial strength which would exert upward pressure on their BFSRs.
In the case of HSH Nordbank, this likely trend could be exacerbated
by the European Commission's as yet outstanding approval for state
aid, which Moody's expects will include a requirement for
a change in the bank's shareholder background. Although the
rating agency expects this to be required only over the medium term,
this could nevertheless lead to a public listing of the bank or a takeover
by private investors. This would in turn almost certainly jeopardise
the bank's membership in Germany's group of public sector
banks -- and thus also HSH's continued benefit from cooperative
support that is still factored into Moody's ratings. Given
the bank's loss-making situation and the persistently challenging
environment in the shipping and commercial real estate markets,
upward pressure on the BFSR -- which could potentially mitigate further
rating pressure from weakening support -- appears very limited for
the foreseeable future.
E+ BFSR CONSTRAINED BY SECTOR CONCENTRATION, WEAK CAPITAL LEVELS
AND CONTINUED NEED OF SUPPORT
Moody's affirmation of the BFSR at the weak E+/developing level reflects
the following short- and long-term challenges to HSH's
(i) The persistent and significant risk faced by the global shipping industry,
to which HSH has an exposure worth approximately EUR35 billion.
Specifically, HSH faces the threat that one or several major bankruptcies
among shipping companies or ship financiers could yet rock the sector,
which may occur if these were followed by fire-sales of assets
and a renewed slump in asset prices.
(ii) HSH's limited access to capital while running a highly capital-intensive
lending franchise. This implies that the bank will need to shrink
its balance sheet to achieve more adequate capitalisation levels over
the coming years.
(iii) The bank's medium-term dependence on costly support
from its owners, the exact costs of which have not yet been decided
by the European Commission, implying major additional uncertainties
for the bank's future performance.
PRIME 1 SHORT-TERM RATING CONFIRMED ON RECENT STABILISATION COUPLED
WITH LIKELY OUTSIDE SUPPORT
Moody's confirmation of HSH's Prime-1 short-term rating
recognises the mitigating effect of the EUR10 billion risk shield that
has been provided by the bank's owners and has been structured as
a second loss guaranty for the vast majority of the bank's assets
and exposures, along with the recent stabilising trend of the group's
liquidity profile and funding situation. The rating agency notes
positively that the bank has made progress in more effectively mobilising
its resources to obtain secured funding, and that it currently holds
a liquidity cushion that should ensure sufficient time to react to any
renewed stress in the markets. More importantly, Moody's
expects that the bank would receive further liquidity support in the foreseeable
future (i.e. in addition to the EUR17 billion in guarantees
drawn from the Financial Market Stabilisation Fund) if renewed stress
in debt capital markets and/or money markets were to constrain HSH's
access to market funding which continues to strongly underpin the bank's
Prime-1 short-term rating.
SUMMARY OF RATINGS AND RATING ACTIONS:
- Rating for senior unsecured debt and deposits: downgraded
to A3, negative
- Rating for senior subordinated debt: downgraded to Baa1,
- Prime-1 short term rating: confirmed
- E+ BFSR (B1 BCA): affirmed, outlook remains
- Aa1 rating for grandfathered obligations, stable outlook:
The previous rating action on HSH Nordbank was implemented on 21 December
2009, when Moody's placed the bank's A2 senior unsecured debt
and deposit ratings, the A3 subordinated debt ratings and the Prime-1
short-term rating on review for possible downgrade and affirmed
the E+ BFSR with its developing outlook.
The principal methodologies used in rating HSH Nordbank were "Moody's
Bank Financial Strength Ratings: Global Methodology", published
in February 2007, "Incorporation of Joint-Default Analysis
into Moody's Bank Ratings", published in March 2007, and "
Moody's Guidelines for Rating Bank Hybrid Securities and Subordinated
Debt", published in November 2009, which are available on
www.moodys.com in the Rating Methodologies sub-directory
under the Research & Ratings tab. Other methodologies and factors
that may have been considered in the process of rating this issuer can
also be found in the Rating Methodologies sub-directory on Moody's
Headquartered in Hamburg and Kiel in northern Germany, HSH Nordbank
reported total assets of EUR174.5 billion as of the end of December
2009 and reported a pre-tax loss of EUR1.3 billion for the
Vice President - Senior Analyst
Financial Institutions Group
Moody's Deutschland GmbH
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
Moody's downgrades HSH Nordbank's LT debt ratings to A3, negative
Financial Institutions Group
Moody's Deutschland GmbH
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
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.