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Rating Action:

Moody's downgrades eight Portuguese banks following downgrade of Portuguese government to A1

Global Credit Research - 14 Jul 2010

Madrid, July 14, 2010 -- Moody's Investors Service has today downgraded the long-term debt and deposit ratings of eight Portuguese banks, following the two-notch downgrade of the Portuguese government's sovereign debt ratings to A1 with a stable outlook from Aa2.

The following five banks have been downgraded by one notch:

- Caixa Geral de Depositos (to A1/Prime-1 from Aa3/Prime-1, with a stable outlook).

- Banco Santander Totta (to A1/Prime-1 from Aa3/Prime-1, with a stable outlook); the rating continues to incorporate unchanged high support assumptions from its parent, Banco Santander S.A. (rated Aa2/Prime-1/B-).

- Banco Espirito Santo (to A2/Prime-1 from A1/Prime-1, with a negative outlook).

- Banco BPI (to A2/Prime-1 from A1/Prime-1, with a negative outlook).

- Espirito Santo Financial Group (ESFG) (to Baa1/Prime-2 from A3/Prime-2, with a negative outlook).

The following three banks have been downgraded by two notches:

- Banco Comercial Portugues (to A3/Prime-2 from A1/Prime-1, with a negative outlook).

- Caixa Economica Montepio Geral (to Baa3/Prime-3 from Baa1/Prime-2, with a stable outlook).

- Banif-Banco Internacional do Funchal (to Baa3/Prime-3 from Baa1/Prime-2, with a negative outlook).

In addition, all rated government-backed debt issues of Portuguese banks have been downgraded to A1 from Aa2, with a stable outlook, in line with the Portuguese government's debt rating.

The review for possible downgrade of the Baa3/Prime-3 ratings for Banco Portugues de Negocios was maintained.

The eight banks' stand-alone financial strength ratings (BFSRs) are not affected by today's rating actions, nor are the banks' hybrid debt ratings as those do not incorporate any systemic support and are linked to the banks' stand-alone ratings. Today's rating action concludes the review for possible downgrade for eight of the nine banks that were placed on review on 5 May 2010.

RATING RATIONALE

"The downgrade of the eight banks' debt ratings reflects the government's reduced ability to support its banks," says Maria-Jose Mori, Assistant Vice President and acting lead analyst for Portuguese bank ratings at Moody's.

However, the impact of the lower government rating on banks' ratings has not been identical: those banks with a higher standalone rating (as indicated by BFSRs in the C category, which applies to Banco Santander Totta, Banco Espirito Santo and Banco BPI) are less affected, since their stronger intrinsic financial flexibility allows them to offset the impact of lower systemic support. Apart from the BFSR, Moody's also takes into account the likelihood of systemic support, which it considers to be very high for all three institutions given their prominent role within the Portuguese financial system.

On the other hand, banks with a lower BFSR (in the D category, which applies to Banco Comercial Portugues, Caixa Economica Montepio Geral and Banif) are more exposed to a weakening systemic support, and the downgrade is therefore of the same two-notch magnitude as that of the government ratings. The exception is Caixa Geral de Depositos: despite its weaker standalone credit profile (it has a D+ BFSR, which maps to a Baa3 onthe long-term rating scale ), it continues to benefit from very strong systemic support due to its size and its status as a 100% state-owned bank with a strong implicit public policy mandate.

The downgrade of Espirito Santo Financial Group (ESFG) was exclusively prompted by the downgrade of its subsidiary Banco Espirito Santo which is the key driver for the rating of ESFG, as the Luxembourg-based holding company does not benefit from any degree of systemic support.

The two-notch downgrade of Banco Comercial Portuges (BCP) reflects, on the one hand, the bank's weaker financial strength (D+ BFSR which maps to a BCA of Baa3) as compared to its higher rated peers. On the other hand, BCP still benefits from three notches of uplift from its BCA (the same as other large domestic players such as BES or BPI) given Moody's view that the bank benefits from a very high likelihood of systemic support in case of need. This is based on BCP's position as Portugal's largest private commercial bank with market shares in deposits exceeding 20%.

The downgrade of Montepio and Banif is the result of their lower-than-average BFSRs (D and D-, respectively) as well as the impact of the sovereign's weakened financial flexibility. Nevertheless, both banks benefit from two and three notches of uplift from their respective standalone ratings that map to BCAs of Ba2 and Ba3, respectively, and incorporates our views of high probability of systemic support.

The Baa3/Prime-3 ratings of Banco Portugues de Negocios (BPN) were left under review for possible downgrade, as originally initiated on 5 May 2010. This rating benefits from a multi-notch uplift from the E+ BFSR (equivalent to a BCA of B3), given Moody's assessment of a very high probability of systemic support. BPN has been 100%-owned by the Portuguese government since its nationalisation in November 2008. The review of the debt and deposit ratings will take into account the outcome of the bank's planned re-privatisation, which was announced by the Portuguese government earlier this year and whose terms and conditions will be released in the next months. Negative pressure on the ratings may result if BPN is sold to a weaker financial institution or if the government decides to split up the bank and sell it in parts.

The specific rating changes implemented today are as follows:

Issuer: Banco BPI Cayman Ltd

..Downgrades:

....Multiple Seniority Medium-Term Note Program, Downgraded to A2, A3 from A1, A2

....Senior Unsecured Regular Bond/Debenture, Downgraded to A2 from A1

..Outlook Actions:

....Outlook, Changed To Negative From Rating Under Review

..Confirmations:

....Multiple Seniority Medium-Term Note Program, Confirmed at P-1

....Senior Unsecured Commercial Paper, Confirmed at P-1

Issuer: Banco BPI S.A.

..Downgrades:

.... Issuer Rating, Downgraded to A2 from A1

....Multiple Seniority Medium-Term Note Program, Downgraded to A2, A3 from A1, A2

....Subordinate Regular Bond/Debenture, Downgraded to A3 from A2

....Senior Unsecured Regular Bond/Debenture, Downgraded to A2 from A1

....Senior Unsecured Deposit Rating, Downgraded to A2, A2 from A1, A1

..Outlook Actions:

....Outlook, Changed To Negative From Rating Under Review

..Confirmations:

.... Deposit Rating, Confirmed at P-1

....Multiple Seniority Medium-Term Note Program, Confirmed at P-1

Issuer: Banco BPI S.A. (Cayman)

..Downgrades:

....Multiple Seniority Medium-Term Note Program, Downgraded to A2, A3 from A1, A2

....Subordinate Regular Bond/Debenture, Downgraded to A3 from A2

....Senior Unsecured Regular Bond/Debenture, Downgraded to A2 from A1

..Outlook Actions:

....Outlook, Changed To Negative From Rating Under Review

..Confirmations:

....Multiple Seniority Medium-Term Note Program, Confirmed at P-1

Issuer: Banco BPI S.A. (Madeira)

..Downgrades:

....Multiple Seniority Medium-Term Note Program, Downgraded to A2, A3 from A1, A2

..Outlook Actions:

....Outlook, Changed To Negative From Rating Under Review

..Confirmations:

....Multiple Seniority Medium-Term Note Program, Confirmed at P-1

Issuer: Banco BPI S.A. (Santa Maria)

..Downgrades:

....Multiple Seniority Medium-Term Note Program, Downgraded to A2, A3 from A1, A2

..Outlook Actions:

....Outlook, Changed To Negative From Rating Under Review

..Confirmations:

....Multiple Seniority Medium-Term Note Program, Confirmed at P-1

Issuer: Banco Comercial Portugues, S.A.

..Downgrades:

.... Deposit Rating, Downgraded to P-2, P-2 from P-1, P-1

....Multiple Seniority Medium-Term Note Program, Downgraded to P-2, A3, Baa1 from P-1, A1, A2

....Senior Unsecured Medium-Term Note Program, Downgraded to A1 from Aa2

....Senior Unsecured Regular Bond/Debenture, Downgraded to a range of A3 to A1 from a range of A1 to Aa2

....Senior Unsecured Deposit Rating, Downgraded to A3, A3 from A1, A1

..Outlook Actions:

....Outlook, Changed To Negative From Rating Under Review

Issuer: Banco Comercial Portugues, SA, Madeira

..Downgrades:

....Multiple Seniority Medium-Term Note Program, Downgraded to P-2, A3, Baa1 from P-1, A1, A2

....Senior Unsecured Commercial Paper, Downgraded to P-2 from P-1

..Outlook Actions:

....Outlook, Changed To Negative From Rating Under Review

Issuer: Banco Espirito Santo N. A. Capital, LLC

..Outlook Actions:

....Outlook, Changed To Negative From Rating Under Review

..Confirmations:

....Senior Unsecured Commercial Paper, Confirmed at P-1

Issuer: Banco Espirito Santo S.A., London Branch

..Downgrades:

....Multiple Seniority Medium-Term Note Program, Downgraded to A2, A3 from A1, A2

....Senior Unsecured Deposit Rating, Downgraded to A2 from A1

..Outlook Actions:

....Outlook, Changed To Negative From Rating Under Review

..Confirmations:

....Multiple Seniority Medium-Term Note Program, Confirmed at P-1

....Senior Unsecured Deposit Program, Confirmed at P-1

....Senior Unsecured Commercial Paper, Confirmed at P-1

Issuer: Banco Espirito Santo, S.A.

..Downgrades:

....Multiple Seniority Medium-Term Note Program, Downgraded to A2, A3 from A1, A2

....Subordinate Regular Bond/Debenture, Downgraded to A3 from A2

....Senior Unsecured Regular Bond/Debenture, Downgraded to a range of A2 to A1 from a range of A1 to Aa2

....Senior Unsecured Deposit Rating, Downgraded to A2, A2 from A1, A1

..Outlook Actions:

....Outlook, Changed To Negative From Rating Under Review

..Confirmations:

.... Deposit Rating, Confirmed at P-1

....Multiple Seniority Medium-Term Note Program, Confirmed at P-1

....Senior Unsecured Commercial Paper, Confirmed at P-1

Issuer: Banco Espirito Santo, S.A., Madeira Branch

..Downgrades:

....Multiple Seniority Medium-Term Note Program, Downgraded to A2, A3 from A1, A2

....Senior Unsecured Deposit Rating, Downgraded to A2, A2 from A1, A1

..Outlook Actions:

....Outlook, Changed To Negative From Rating Under Review

..Confirmations:

.... Deposit Rating, Confirmed at P-1

....Multiple Seniority Medium-Term Note Program, Confirmed at P-1

....Senior Unsecured Commercial Paper, Confirmed at P-1

Issuer: Banco Espirito Santo, S.A., Cayman Branch

..Downgrades:

....Multiple Seniority Medium-Term Note Program, Downgraded to A2, A3 from A1, A2

....Subordinate Bank Credit Facility, Downgraded to A3 from A2

....Senior Unsecured Regular Bond/Debenture, Downgraded to A2 from A1

....Senior Unsecured Deposit Rating, Downgraded to A2, A2 from A1, A1

..Outlook Actions:

....Outlook, Changed To Negative From Rating Under Review

..Confirmations:

.... Deposit Rating, Confirmed at P-1

....Multiple Seniority Medium-Term Note Program, Confirmed at P-1

....Senior Unsecured Commercial Paper, Confirmed at P-1

Issuer: Banco Santander Totta S.A.

..Downgrades:

....Multiple Seniority Medium-Term Note Program, Downgraded to A1, A2 from Aa3, A1

....Senior Unsecured Regular Bond/Debenture, Downgraded to A1 from Aa3

....Senior Unsecured Deposit Rating, Downgraded to A1, A1 from Aa3, Aa3

..Outlook Actions:

....Outlook, Changed To Stable(m) From Rating Under Review

Issuer: Banco Santander Totta S.A., London

..Downgrades:

....Multiple Seniority Medium-Term Note Program, Downgraded to A1, A2 from Aa3, A1

....Subordinate Regular Bond/Debenture, Downgraded to A2 from A1

....Senior Unsecured Regular Bond/Debenture, Downgraded to A1 from Aa3

..Outlook Actions:

....Outlook, Changed To Stable(m) From Rating Under Review

Issuer: BANIF - Sucursal Financeira Exterior

..Downgrades:

....Multiple Seniority Medium-Term Note Program, Downgraded to P-3, Baa3, Ba1 from P-2, Baa1, Baa2

..Outlook Actions:

....Outlook, Changed To Negative(m) From Rating Under Review

Issuer: BANIF-Banco Internacional do Funchal, S.A.

..Downgrades:

.... Deposit Rating, Downgraded to P-3, P-3 from P-2, P-2

....Multiple Seniority Medium-Term Note Program, Downgraded to P-3, Baa3, Ba1 from P-2, Baa1, Baa2

....Subordinate Regular Bond/Debenture, Downgraded to Ba1 from Baa2

....Senior Unsecured Regular Bond/Debenture, Downgraded to a range of Baa3 to A1 from a range of Baa1 to Aa2

....Senior Unsecured Deposit Rating, Downgraded to Baa3, Baa3 from Baa1, Baa1

..Outlook Actions:

....Outlook, Changed To Negative(m) From Rating Under Review

Issuer: BCP Finance Bank, Ltd.

..Downgrades:

....Multiple Seniority Medium-Term Note Program, Downgraded to P-2, A3, Baa1 from P-1, A1, A2

....Subordinate Regular Bond/Debenture, Downgraded to Baa1 from A2

....Senior Unsecured Commercial Paper, Downgraded to P-2 from P-1

....Senior Unsecured Regular Bond/Debenture, Downgraded to A3 from A1

..Outlook Actions:

....Outlook, Changed To Negative From Rating Under Review

Issuer: BCP Finance Company

..Downgrades:

....Multiple Seniority Shelf, Downgraded to (P)Baa1 from (P)A2

..Outlook Actions:

....Outlook, Changed To Negative From Rating Under Review

Issuer: Banif Finance, Limited

..Downgrades:

....Multiple Seniority Medium-Term Note Program, Downgraded to P-3, Baa3, Ba1 from P-2, Baa1, Baa2

....Subordinate Regular Bond/Debenture, Downgraded to Ba1 from Baa2

....Senior Unsecured Regular Bond/Debenture, Downgraded to Baa3 from Baa1

..Outlook Actions:

....Outlook, Changed To Negative(m) From Rating Under Review

Issuer: BES Finance Ltd.

..Downgrades:

....Junior Subordinated Regular Bond/Debenture, Downgraded to A3 from A2

....Multiple Seniority Medium-Term Note Program, Downgraded to A2, A3 from A1, A2

....Subordinate Regular Bond/Debenture, Downgraded to A3 from A2

....Senior Unsecured Conv./Exch. Bond/Debenture, Downgraded to A2 from A1

....Senior Unsecured Regular Bond/Debenture, Downgraded to A2 from A1

..Outlook Actions:

....Outlook, Changed To Negative From Rating Under Review

..Confirmations:

....Multiple Seniority Medium-Term Note Program, Confirmed at P-1

Issuer: BPI Capital Finance Ltd.

..Downgrades:

....Multiple Seniority Medium-Term Note Program, Downgraded to A2, A3 from A1, A2

..Outlook Actions:

....Outlook, Changed To Negative From Rating Under Review

..Confirmations:

....Multiple Seniority Medium-Term Note Program, Confirmed at P-1

Issuer: Caixa Economica Montepio Geral

..Downgrades:

.... Deposit Rating, Downgraded to P-3, P-3 from P-2, P-2

....Multiple Seniority Medium-Term Note Program, Downgraded to P-3, Baa3, Ba1 from P-2, Baa1, Baa2

....Senior Unsecured Regular Bond/Debenture, Downgraded to Baa3 from Baa1

....Senior Unsecured Deposit Rating, Downgraded to Baa3, Baa3 from Baa1, Baa1

..Outlook Actions:

....Outlook, Changed To Stable From Rating Under Review

Issuer: Caixa Economica Montepio Geral, Cay. Is. Br.

..Downgrades:

....Multiple Seniority Medium-Term Note Program, Downgraded to P-3, Baa3, Ba1 from P-2, Baa1, Baa2

....Subordinate Regular Bond/Debenture, Downgraded to Ba1 from Baa2

....Senior Unsecured Regular Bond/Debenture, Downgraded to Baa3 from Baa1

..Outlook Actions:

....Outlook, Changed To Stable From Rating Under Review

Issuer: Caixa Geral de Depositos Finance

..Downgrades:

....Multiple Seniority Medium-Term Note Program, Downgraded to A1, A2 from Aa3, A1

....Subordinate Regular Bond/Debenture, Downgraded to A2 from A1

..Outlook Actions:

....Outlook, Changed To Stable From Rating Under Review

Issuer: Caixa Geral de Depositos, S.A.

..Downgrades:

....Multiple Seniority Medium-Term Note Program, Downgraded to A1, A2 from Aa3, A1

....Subordinate Regular Bond/Debenture, Downgraded to A2 from A1

....Senior Unsecured Regular Bond/Debenture, Downgraded to A1 from a range of Aa3 to Aa2

....Senior Unsecured Deposit Rating, Downgraded to A1, A1 from Aa3, Aa3

..Outlook Actions:

....Outlook, Changed To Stable From Rating Under Review

Issuer: Caixa Geral de Depositos, S.A. (Madeira)

..Downgrades:

....Multiple Seniority Medium-Term Note Program, Downgraded to A1, A2 from Aa3, A1

..Outlook Actions:

....Outlook, Changed To Stable From Rating Under Review

Issuer: Caixa Geral de Depositos, S.A. (Paris)

..Downgrades:

....Multiple Seniority Medium-Term Note Program, Downgraded to A1, A2 from Aa3, A1

....Subordinate Regular Bond/Debenture, Downgraded to A2 from A1

....Senior Unsecured Deposit Note/Takedown, Downgraded to A1 from Aa3

....Senior Unsecured Regular Bond/Debenture, Downgraded to A1 from Aa3

..Outlook Actions:

....Outlook, Changed To Stable From Rating Under Review

Issuer: Caixa Geral de Depositos/New York

..Downgrades:

....Senior Unsecured Deposit Rating, Downgraded to A1 from Aa3

..Outlook Actions:

....Outlook, Changed To Stable From Rating Under Review

Issuer: Espirito Santo Financial Group S.A.

..Downgrades:

.... Issuer Rating, Downgraded to Baa1 from A3

....Subordinate Regular Bond/Debenture, Downgraded to Baa2 from Baa1

....Senior Unsecured Conv./Exch. Bond/Debenture, Downgraded to Baa1 from A3

..Outlook Actions:

....Outlook, Changed To Negative From Rating Under Review

..Confirmations:

....Senior Unsecured Commercial Paper, Confirmed at P-2

Issuer: Espirito Santo Financiere S.A.

..Downgrades:

....Senior Unsecured Regular Bond/Debenture, Downgraded to Baa1 from A3

..Outlook Actions:

....Outlook, Changed To Negative From Rating Under Review

..Confirmations:

....Senior Unsecured Commercial Paper, Confirmed at P-2

Issuer: Espirito Santo Investment plc

..Downgrades:

....Multiple Seniority Medium-Term Note Program, Downgraded to A2, A3 from A1, A2

....Senior Unsecured Regular Bond/Debenture, Downgraded to A2 from A1

..Outlook Actions:

....Outlook, Changed To Negative From Rating Under Review

..Confirmations:

....Multiple Seniority Medium-Term Note Program, Confirmed at P-1

Issuer: Espirito Santo Plc

..Outlook Actions:

....Outlook, Changed To Stable From Rating Under Review

..Confirmations:

....Senior Unsecured Commercial Paper, Confirmed at P-1

PREVIOUS RATING ACTIONS

The previous rating action on Caixa Geral de Depositos (CGD) was on 2 June 2010, when Moody's downgraded its BFSR by one notch to D+ (mapping to a long-term rating scale of Baa3), stable outlook, from C- (mapping to Baa2). Its LT debt and deposit ratings were downgraded to Aa3 from Aa2 and maintained under review for possible downgrade, and its senior subordinated debt was downgraded to A1 from Aa3 and maintained under review for possible downgrade. Its junior subordinated debt was downgraded to Baa2 with a stable outlook, from Baa1, and its preferred securities were downgraded to Ba1 with a stable outlook, from Baa3.

The previous rating action on Banco Espirito Santo (BES) was on 2 June 2010, when Moody's confirmed its BFSR at C- and changed its long-term scale equivalent rating to Baa2 from Baa1, with a negative outlook. Moody's maintained BES's A1/Prime-1 debt and deposit ratings on review for possible downgrade, as well as its A2 senior subordinated debt. Its junior subordinated debt was downgraded by one notch to Baa3, with a negative outlook, and its Tier 1 capital instruments were downgraded by one notch to Ba2, with a negative outlook.

The previous rating action on Espirito Santo Financial Group (ESFG) was on 2 June 2010, when Moody's maintained its issuer rating of A3 on review for possible downgrade. The Prime-2 short term ratings of ESFG's ECP programme were also maintained on review for possible downgrade, as well as its Baa1 senior subordinated debt. Its preferred securities were downgraded to Ba3 with a negative outlook, from Ba2.

The previous rating action on Banco Comercial Portugues (BCP) was on 2 June 2010, when Moody's confirmed its BFSR at D+ (mapping to a Baa3 on the long-term scale), with a negative outlook. Moody's maintained BCP's A1/Prime-1 debt and deposit ratings on review for possible downgrade, as well as its A2 senior subordinated debt. Its Tier 1 capital instruments were confirmed at Ba3 and assigned a negative outlook.

The previous rating action on Banco BPI (BPI) was on 2 June 2010, when Moody's confirmed its BFSR at C- (mapping to a Baa2 on the long-term scale), with a negative outlook. Moody's maintained BPI's A1/Prime-1 debt and deposit ratings on review for possible downgrade, as well as its A2 senior subordinated debt. BPI's junior subordinated debt was confirmed at Baa3, with a negative outlook, and its preferred securities were confirmed at Ba2, with a negative outlook.

The previous rating action on Banco Santander Totta (BST) was on 2 June 2010, when Moody's confirmed its BFSR at C (mapping to an A3 on the long-term scale), with a negative outlook. Moody's maintained Banco Santander Totta's Aa3 long-term debt and deposit ratings on review for possible downgrade. BST's short-term ratings were affirmed at Prime-1, its A1 senior subordinated debt was maintained on review for possible downgrade and its junior subordinated debt was confirmed at A3, with a negative outlook.

The previous rating action on Caixa Economica Montepio Geral (Montepio) was on 2 June 2010, when Moody's confirmed its BFSR at D (mapping to a Ba2 on the long-term scale), with a stable outlook. Moody's maintained Montepio's Baa1/Prime-2 debt and deposit ratings on review for possible downgrade, as well as its Baa2 senior subordinated debt, while its junior subordinated debt was confirmed at Ba3, with a stable outlook.

The previous rating action on Banif was on 2 June 2010, when Moody's confirmed its BFSR at D- (mapping to a Ba3 on the long-term scale), with a stable outlook. Moody's maintained Banif's Baa1/Prime-2 debt and deposit ratings on review for possible downgrade, as well as its Baa2 senior subordinated debt. Its junior subordinated debt was confirmed at B1, with stable outlook and its preferred securities were confirmed at B3, with stable outlook.

RATING METHODOLOGIES APPLIED

The principal methodologies used in rating these issuers are Moody's "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, 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 these issuers can also be found in the Rating Methodologies sub-directory on Moody's website.

CGD is headquartered in Lisbon, Portugal. At 31 December 2009, it had total assets of EUR120.9 billion.

BES is headquartered in Lisbon, Portugal. At 31 December 2009, it had total assets of EUR82.3 billion.

ESFG is headquartered in Luxembourg. At 31 December 2009, it had total assets of EUR85.3 billion.

BCP is headquartered in Oporto, Portugal. At 31 December 2009, it had total assets of EUR95.6 billion.

BPI is headquartered in Lisbon, Portugal. At 31 December 2009, it had total assets of EUR47.5 billion.

BST is headquartered in Lisbon, Portugal. At 31 December 2009, it had total assets of EUR45.7 billion.

Montepio is headquartered in Lisbon, Portugal. At 31 December 2009, it had total assets of EUR17.2 billion.

Banif is headquartered in Funchal, Portugal. At 31 December 2009, it had total assets of EUR11.6 billion.

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

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

Moody's downgrades eight Portuguese banks following downgrade of Portuguese government to A1
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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.