Madrid, October 19, 2011 -- Moody's Investors Service has today downgraded the long-term senior
debt and deposit ratings of five Spanish banks by one notch. These
rating actions follow yesterday's downgrade of the Kingdom of Spain's
government bond rating to A1 from Aa2. All of the banks'
ratings carry a negative outlook. The affected banks are Banco
Santander, BBVA, CaixaBank , La Caixa and Confederaci?n
Espa?ola de Cajas de Ahorros (CECA).
The banks' standalone bank financial strength ratings (BFSRs) --
which were not part of the review initiated on 29 July 2011 --
have not been affected by the rating action on the Kingdom of Spain.
However, over the coming weeks Moody's will be assessing any
possible implications of revised economic projections for the Spanish
economy on the performance of Spanish banks' assets and the potential
negative impact on the ratings of the overall banking sector.
In addition, Moody's has also downgraded (i) the senior subordinated
debt of these entities; (ii) all rated government-backed debt
issuances from Spanish banks; and (iii) the rated long-term
debt of Instituto de Credito Oficial (ICO), the ratings of which
are based on the unconditional and irrevocable guarantee from the Spanish
Government.
A full list of all the affected ratings can be found at the end of the
press release.
These rating actions conclude the reviews for downgrade initiated on 29
July 2011, which followed the review for possible downgrade of the
Spanish government ratings on 17 June 2011.
Please find the press release on the sovereign rating action including
the key rating rationale here: http://www.moodys.com/research/Moodys-downgrades-Spains-government-bond-ratings-to-A1-negative-outlook--PR_228099
RATINGS RATIONALE
RATIONALE FOR THE DOWNGRADE OF SENIOR DEBT RATINGS
Today's rating action has been prompted by the downgrade of the
Kingdom of Spain to A1 from Aa2. The downgrade of the Spanish government
has only affected the debt and deposit ratings of those banks that have
high standalone ratings and that Moody's believes have a high probability
of benefiting from systemic support. These banks are Banco Santander,
BBVA, Caixabank (all of which have standalone ratings of B-/A1)
and CECA (which has a standalone rating of C/A3). With the government
rating now at A1, Moody's believes that the benefit of potential
support from the government is less pronounced relative to the standalone
strength of these banks, which is reflected in standalone ratings
that are at or close to the sovereign's own rating at A1.
Moody's nevertheless continues to factor in one notch of systemic support
for these banks to reflect the high likelihood that support would be forthcoming.
The debt ratings of La Caixa, Caixabank's holding company,
are notched off the long-term debt rating of Caixabank and have
therefore also been downgraded by one notch to A2 from A1.
All banks' debt ratings carry a negative outlook reflecting the current
negative outlook of the Spanish government's A1 bond rating and the negative
outlook on the banks' standalone BFSRs.
RATINGS RATIONALE FOR SENIOR SUBORDINATED DEBT
Moody's has downgraded the senior subordinated debt ratings of four Spanish
banks, in line with the downgrade of these banks' senior unsecured
debt ratings. This rating approach implies that if a bank's senior
debt rating benefits from an assumption of systemic support, its
subordinated debt will benefit similarly. Moody's will continue,
however, to reassess its systemic support assumptions for subordinated
debt in Spain, alongside parallel reassessments in other European
countries, over the remainder of this year in the light of prospective
European banking legislation. This reassessment has not affected
today's rating actions.
RATINGS RATIONALE FOR GOVERNMENT-GUARANTEED DEBT
As a direct consequence of the downgrade of the Spanish government's bond
rating to A1 from Aa2, Moody's has also downgraded to A1 from Aa2
the backed senior debt of 18 institutions. The backed-A1
ratings assigned are based on the unconditional guarantee, which
directly links them to the ratings of the Spanish government. (See
"Moody's to assign backed Aaa ratings to new euro-denominated long-term
debt securities covered by Spanish government's guarantee," published
on 22 January 2009.)
RATINGS RATIONALE FOR THE DOWNGRADE OF ICO's RATINGS
Moody's has downgraded to A1 from Aa2 all the rated debt of Instituto
de Credito Oficial (ICO). Since ICO's liabilities are explicitly,
irrevocably, directly and unconditionally guaranteed by the government
of Spain, the rating action on ICO is triggered by the two-notch
downgrade of the sovereign's ratings.
WHAT COULD CHANGE THE RATINGS UP
An improvement in the banks' standalone BFSRs could exert upward pressure
on the banks' debt and deposit ratings; please refer to www.moodys.com
for a more detailed discussion of each individual bank's key rating drivers.
However, in the current difficult operating environment, the
opportunity for this appears very limited. An upgrade of the Spanish
government bond rating could also exert upward pressure on the banks'
debt and deposit ratings; however, this too is unlikely given
the negative outlook on the ratings of the Spanish government.
WHAT COULD CHANGE THE RATINGS DOWN
The ratings of those banks that continue to benefit from systemic support
remain somewhat linked both to the creditworthiness of the Spanish government
and to any further reduction in Moody's systemic support assumptions.
Any further developments relating to the legislation governing the resolution
powers regarding banks -- i.e., developments
that increase the likelihood of senior creditors incurring losses --
could exert downward pressure on the deposit and debt ratings of those
banks that currently benefit from systemic support. Any downgrades
of the BFSRs on the individual banks could also lead to additional negative
rating pressures. In the following weeks, Moody?s will
be assessing the wider implications of its revised economic projections
for the Spanish economy for the performance of Spanish banks' assets
and the potential impact on their ratings.
The following ratings have been affected by the downgrade of the Spanish
government:
Downgrades:
..Issuer: Banca March S.A.
....Senior Unsecured Medium-Term Note
Program, Downgraded to (P)A1 from (P)Aa2
..Issuer: Banco CAM
....Senior Unsecured Medium-Term Note
Program, Downgraded to (P)A1 from (P)Aa2
....Senior Unsecured Regular Bond/Debenture,
Downgraded to A1 from Aa2
..Issuer: Banco Cooperativo Espanol, S.A.
....Senior Unsecured Medium-Term Note
Program, Downgraded to (P)A1 from (P)Aa2
....Senior Unsecured Regular Bond/Debenture,
Downgraded to A1 from Aa2
..Issuer: Banco Financiero y de Ahorro
....Senior Unsecured Regular Bond/Debenture,
Downgraded to A1 from Aa2
..Issuer: Banco Pastor, S.A.
....Senior Unsecured Medium-Term Note
Program, Downgraded to (P)A1 from (P)Aa2
....Senior Unsecured Regular Bond/Debenture,
Downgraded to A1 from Aa2
..Issuer: Banco Popular Espanol, S.A.
....Senior Unsecured Medium-Term Note
Program, Downgraded to (P)A1 from (P)Aa2
....Senior Unsecured Regular Bond/Debenture,
Downgraded to A1 from Aa2
..Issuer: Banco Sabadell, S.A.
....Senior Unsecured Medium-Term Note
Program, Downgraded to (P)A1 from (P)Aa2
..Issuer: Bankia
....Senior Unsecured Medium-Term Note
Program, Downgraded to (P)A1 from (P)Aa2
....Senior Unsecured Regular Bond/Debenture,
Downgraded to A1 from Aa2
..Issuer: Bankinter, S.A.
....Senior Unsecured Medium-Term Note
Program, Downgraded to (P)A1 from (P)Aa2
....Senior Unsecured Regular Bond/Debenture,
Downgraded to A1 from Aa2
..Issuer: Caja Espana de Inversiones, Salamanca
y Soria
....Senior Unsecured Medium-Term Note
Program, Downgraded to (P)A1 from (P)Aa2
....Senior Unsecured Regular Bond/Debenture,
Downgraded to A1 from Aa2
..Issuer: Cajamar Caja Rural, Soc. Coop.
de Credito
....Senior Unsecured Medium-Term Note
Program, Downgraded to (P)A1 from (P)Aa2
....Senior Unsecured Regular Bond/Debenture,
Downgraded to A1 from Aa2
..Issuer: Catalunya Banc SA
....Senior Unsecured Medium-Term Note
Program, Downgraded to (P)A1 from (P)Aa2
....Senior Unsecured Regular Bond/Debenture,
Downgraded to A1 from Aa2
..Issuer: Ibercaja Banco SA
....Senior Unsecured Regular Bond/Debenture,
Downgraded to A1 from Aa2
..Issuer: Liberbank
....Senior Unsecured Medium-Term Note
Program, Downgraded to (P)A1 from (P)Aa2
....Senior Unsecured Regular Bond/Debenture,
Downgraded to A1 from Aa2
..Issuer: Lico Leasing, S.A.
....Senior Unsecured Regular Bond/Debenture,
Downgraded to A1 from Aa2
..Issuer: NCG Banco S.A.
....Senior Unsecured Regular Bond/Debenture,
Downgraded to A1 from Aa2
..Issuer: Unicaja
....Senior Unsecured Medium-Term Note
Program, Downgraded to (P)A1 from (P)Aa2
....Senior Unsecured Regular Bond/Debenture,
Downgraded to A1 from Aa2
..Issuer: Banco Santander S.A. (Spain)
.... Issuer Rating, Downgraded to Aa3
from Aa2
....Multiple Seniority Medium-Term
Note Program, Downgraded to (P)Aa3, (P)A1 from (P)Aa2,
(P)Aa3
....Subordinate Regular Bond/Debenture,
Downgraded to A1 from Aa3
....Senior Unsecured Deposit Rating,
Downgraded to Aa3 from Aa2
..Issuer: Banco Santander, S.A.,
London Branch
....Senior Unsecured Deposit Program,
Downgraded to (P)Aa3 from (P)Aa2
..Issuer: Santander Central Hispano International
Ltd
....Senior Unsecured Medium-Term Note
Program, Downgraded to (P)Aa3 from (P)Aa2
....Senior Unsecured Regular Bond/Debenture,
Downgraded to Aa3 from Aa2
..Issuer: Santander Central Hispano Issuances Ltd.
....Multiple Seniority Medium-Term
Note Program, Downgraded to (P)A1 from (P)Aa3
....Subordinate Regular Bond/Debenture,
Downgraded to A1 from Aa3
....Subordinate Shelf, Downgraded to
(P)A1 from (P)Aa3
..Issuer: Santander Int'l Debt, S.A.
Unipersonal
....Multiple Seniority Medium-Term
Note Program, Downgraded to (P)Aa3 from (P)Aa2
....Senior Unsecured Medium-Term Note
Program, Downgraded to (P)Aa3 from (P)Aa2
....Senior Unsecured Regular Bond/Debenture,
Downgraded to Aa3 from Aa2
..Issuer: Santander Issuances S.A. Unipersonal
....Multiple Seniority Medium-Term
Note Program, Downgraded to (P)A1 from (P)Aa3
....Subordinate Medium-Term Note Program,
Downgraded to (P)A1 from (P)Aa3
....Subordinate Regular Bond/Debenture,
Downgraded to A1 from Aa3
..Issuer: Santander US Debt, S.A.
Unipersonal
....Senior Unsecured Regular Bond/Debenture,
Downgraded to Aa3 from Aa2
..Issuer: Banco Bilbao Vizcaya Argentaria, S.A.
.... Issuer Rating, Downgraded to Aa3
from Aa2
....Multiple Seniority Medium-Term
Note Program, Downgraded to a range of (P)A1 to (P)Aa3 from a range
of (P)Aa3 to (P)Aa2
....Subordinate Regular Bond/Debenture,
Downgraded to A1 from Aa3
....Senior Unsecured Regular Bond/Debenture,
Downgraded to Aa3 from Aa2
....Senior Unsecured Deposit Rating,
Downgraded to Aa3 from Aa2
..Issuer: Banco Bilbao Vizcaya Argentaria, SA
London Br
....Senior Unsecured Deposit Rating,
Downgraded to Aa3 from Aa2
..Issuer: Banco de Credito Local de Espana,
S.A.
....Multiple Seniority Medium-Term
Note Program, Downgraded to (P)Aa3 from (P)Aa2
....Multiple Seniority Medium-Term
Note Program, Downgraded to (P)A1 from (P)Aa3
....Subordinate Regular Bond/Debenture,
Downgraded to A1 from Aa3
....Subordinate Shelf, Downgraded to
(P)A1 from (P)Aa3
..Issuer: BBVA Global Finance Ltd.
....Multiple Seniority Medium-Term
Note Program, Downgraded to (P)Aa3 from (P)Aa2
....Subordinate Regular Bond/Debenture,
Downgraded to A1 from Aa3
....Senior Unsecured Regular Bond/Debenture,
Downgraded to Aa3 from Aa2
....Senior Unsecured Shelf, Downgraded
to (P)Aa3 from (P)Aa2
..Issuer: BBVA Global Markets B.V.
....Senior Unsecured Medium-Term Note
Program, Downgraded to (P)Aa3 from (P)Aa2
....Senior Unsecured Regular Bond/Debenture,
Downgraded to Aa3 from Aa2
..Issuer: BBVA Senior Finance, S.A.
Unipersonal
....Senior Unsecured Medium-Term Note
Program, Downgraded to (P)Aa3 from (P)Aa2
....Senior Unsecured Regular Bond/Debenture,
Downgraded to Aa3 from Aa2
..Issuer: BBVA Subordinated Capital, S.A.
Unipersonal
....Multiple Seniority Medium-Term
Note Program, Downgraded to (P)A1 from (P)Aa3
....Subordinate Regular Bond/Debenture,
Downgraded to A1 from Aa3
..Issuer: BBVA U.S. Senior, S.A.
Unipersonal
....Senior Unsecured Medium-Term Note
Program, Downgraded to (P)Aa3 from (P)Aa2
....Senior Unsecured Regular Bond/Debenture,
Downgraded to Aa3 from Aa2
..Issuer: BCL International Finance Limited
....Senior Unsecured Regular Bond/Debenture,
Downgraded to Aa3 from Aa2
..Issuer: Caixa Finance B.V.
....Senior Unsecured Regular Bond/Debenture,
Downgraded to Aa3 from Aa2
..Issuer: Caixabank
.... Issuer Rating, Downgraded to Aa3
from Aa2
....Multiple Seniority Medium-Term
Note Program, Downgraded to a range of (P)A1 to (P)Aa3 from a range
of (P)Aa3 to (P)Aa2
....Senior Unsecured Medium-Term Note
Program, Downgraded to (P)Aa3 from (P)Aa2
....Senior Unsecured Regular Bond/Debenture,
Downgraded to Aa3 from Aa2
....Senior Unsecured Deposit Rating,
Downgraded to Aa3 from Aa2
..Issuer: Caja de Ahorros y Pensiones de Barcelona
.... Issuer Rating, Downgraded to A2
from A1
....Subordinate Regular Bond/Debenture,
Downgraded to A3 from A2
....Senior Unsecured Regular Bond/Debenture,
Downgraded to A1 from Aa2
..Issuer: Confederacion Espanola de Cajas de Ahorro
....Senior Unsecured Deposit Rating,
Downgraded to A2 from A1
..Issuer: Instituto de Credito Oficial
....Senior Unsecured Commercial Paper,
Downgraded to A1 from Aa2
....Senior Unsecured Medium-Term Note
Program, Downgraded to (P)A1 from (P)Aa2
....Senior Unsecured Regular Bond/Debenture,
Downgraded to A1 from Aa2
....Senior Unsecured Shelf, Downgraded
to (P)A1 from (P)Aa2
Outlook Actions:
..Issuer: Banco Bilbao Vizcaya Argentaria, S.A.
....Outlook, Changed To Negative From
Rating Under Review
..Issuer: Banco Bilbao Vizcaya Argentaria, SA
London Br
....Outlook, Changed To Negative From
Rating Under Review
..Issuer: Banco de Credito Local de Espana,
S.A.
....Outlook, Changed To Negative From
Rating Under Review
..Issuer: BBVA Capital Funding Limited
....Outlook, Changed To Negative From
Rating Under Review
..Issuer: BBVA Global Finance Ltd.
....Outlook, Changed To Negative From
Rating Under Review
..Issuer: BBVA Global Markets B.V.
....Outlook, Changed To Negative From
Rating Under Review
..Issuer: BBVA Senior Finance, S.A.
Unipersonal
....Outlook, Changed To Negative From
Rating Under Review
..Issuer: BBVA Subordinated Capital, S.A.
Unipersonal
....Outlook, Changed To Negative From
Rating Under Review
..Issuer: BBVA U.S. Senior, S.A.
Unipersonal
....Outlook, Changed To Negative From
Rating Under Review
..Issuer: Caixa Finance B.V.
....Outlook, Changed To Negative From
Rating Under Review
..Issuer: Caixabank
....Outlook, Changed To Negative From
Rating Under Review
..Issuer: Caja de Ahorros y Pensiones de Barcelona
....Outlook, Changed To Negative From
Rating Under Review
..Issuer: Confederacion Espanola de Cajas de Ahorro
....Outlook, Changed To Negative From
Rating Under Review
..Issuer: Instituto de Credito Oficial
....Outlook, Changed To Negative From
Rating Under Review
..Issuer: Banco Santander S.A. (Spain)
....Outlook, Changed To Negative From
Rating Under Review
..Issuer: Banco Santander, S.A.,
London Branch
....Outlook, Changed To Negative From
Rating Under Review
..Issuer: Santander Central Hispano International
Ltd
....Outlook, Changed To Negative From
Rating Under Review
..Issuer: Santander Central Hispano Issuances Ltd.
....Outlook, Changed To Negative From
Rating Under Review
..Issuer: Santander Int'l Debt, S.A.
Unipersonal
....Outlook, Changed To Negative From
Rating Under Review
..Issuer: Santander Issuances S.A. Unipersonal
....Outlook, Changed To Negative From
Rating Under Review
..Issuer: Santander US Debt, S.A.
Unipersonal
....Outlook, Changed To Negative From
Rating Under Review
PRINCIPAL METHODOLOGIES
The methodologies used in these ratings were Bank Financial Strength Ratings:
Global Methodology published in February 2007, and Incorporation
of Joint-Default Analysis into Moody's Bank Ratings: A Refined
Methodology published in March 2007. 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 rating have been disclosed to the rated entities or its designated
agent(s) and issued with/with no amendment resulting from that disclosure.
Information sources used to prepare each of the ratings are the following
: parties involved in the ratings, and public information.
Moody's considers the quality of information available on the rated entity,
obligation or credit satisfactory for the purposes of issuing a rating.
In addition to the information provided below please find on the ratings
tab of the issuer page at www.moodys.com, for each
of the ratings covered, Moody's disclosures on the lead rating
analyst and the Moody's legal entity that has issued each of the
ratings.
Moody's adopts all necessary measures so that the information it uses
in assigning a 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.
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
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 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.
Calle Principe de Vergara, 131, 6 Planta
Madrid 28002
Spain
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
Moody's downgrades five Spanish banks following Spain's downgrade to A1
