Actions follow the review of European parents' ratings
New York, February 22, 2012 -- Moody's Investors Service today placed on review for downgrade certain
long- and short-term debt and deposit ratings of North American
bank subsidiaries of European banks affected by its rating actions on
15 February, 2012. Today's actions primarily reflect
the potential adverse effects of any weakening of the European parents
on their capacity and/or willingness to support their subsidiaries in
North America. At the same time, Moody's has placed
on review the standalone credit assessments of the North American bank
subsidiaries of three European banks (BNP Paribas, ING Groep N.V.
and Royal Bank of Scotland plc) to reflect the potential adverse consequences
from weakening creditworthiness at the parent level on their financial
strength. Moody's has also extended the review of the standalone
credit assessments of Deutsche Bank AG's North American bank subsidiaries.
Today's announcement follows the placement on review of the ratings
of the affected subsidiaries' parents, specifically seven
European banking groups. These actions are discussed in the press
releases "Moody's Reviews Ratings for European Banks" and "Moody's
Reviews Ratings for Banks and Securities Firms with Global Capital Markets
Operations," both dated 15 February, 2012 and available
on moodys.com.
The affected subsidiaries are as follows (in alphabetical order of their
parent groups):
Subsidiaries of Banco Bilbao Vizcaya Argentaria, S.A.:
- BBVA USA Bancshares, Inc.
- Compass Bank
- Phoenix Loan Holdings
- Banco Bilbao Vizcaya Argentaria Puerto Rico
Subsidiaries of Banco Santander, S.A.:
- Santander Holdings USA, Inc.
- Sovereign Bank
- Sovereign Capital Trust IV
- Sovereign Capital Trust V
- Sovereign Capital Trust VI
- Sovereign Real Estate Investment Trust
- Banco Santander Puerto Rico
Subsidiaries of BNP Paribas:
- Bank of the West
- First Hawaiian Bank
- First Hawaiian Capital I
Subsidiaries of Deutsche Bank AG:
- Deutsche Bank Trust Corporation
- Deutsche Bank National Trust Company
- Deutsche Bank Trust Company Americas
- Deutsche Bank Trust Company Delaware
Subsidiaries of HSBC Holdings plc:
- HSBC USA Inc.
- HSBC Bank USA, N.A.
- HSBC USA Capital Trust I
- HSBC USA Capital Trust III
- Republic New York Corporation
- HSBC Finance Corporation
- HSBC Financial Corporation Limited
- HFC Bank plc
- Beneficial Corporation
- HSBC Finance Capital Trust IX
Subsidiary of ING Groep N.V.:
- ING Bank of Canada
Subsidiaries of Royal Bank of Scotland plc:
- Charter One Bank, N.A.
- Citizens Bank of Pennsylvania
- RBS Citizens, NA
Please click on this link to access the list of affected credit ratings:
http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_139987.
This list is an integral part of this press release and identifies each
affected issuer and its ratings.
RATINGS RATIONALE
During the reviews of the subsidiaries' supported debt and deposit
ratings, Moody's will assess the effects of any sustained
decline in the capacity of parent groups to support their subsidiaries.
It will also assess any changes in the willingness or likelihood that
parent groups will provide support if needed. This part of each
review will consider: (i) any pressure on a parent group to refocus
on its core domestic franchise; (ii) any changes in the medium-term
strategic fit of a subsidiary; and (iii) the potential for a gradual
withdrawal from the markets in which a subsidiary operates, given
the Europe-wide scarcity of capital resources.
During the reviews of the standalone credit assessments of the North American
bank subsidiaries of BNP Paribas, Deutsche Bank AG, ING Groep
N.V. and Royal Bank of Scotland plc, Moody's
will assess concerns about how pressures on the parent groups may affect
the subsidiaries' standalone credit profiles through their close
ties, including financial, branding and managerial linkages.
This will include the risk that subsidiaries may come under pressure to
upstream capital to their parents or take more risks to grow profits.
Moody's will assess the positioning of each subsidiary's standalone
credit assessment relative to its parent's standalone profile,
taking into account (i) funding dependence; (ii) profitability;
(iii) exposure to the parent and common exposures; and (iv) regulatory
barriers to control the distribution of capital resources from a subsidiary
to a parent.
The reviews will be concluded after those on the parent groups are concluded.
RATING METHODOLOGIES
The methodologies used in these ratings were "Bank Financial Strength
Ratings: Global Methodology" (published February 2007),
"Incorporation of Joint-Default Analysis into Moody's
Bank Ratings: A Refined Methodology" (published March 2007)
and "Moody's Guidelines for Rating Bank Hybrid Securities
and Subordinated Debt" (published November 2009). Please
see the Credit Policy page on www.moodys.com for a copy
of these methodologies.
REGULATORY DISCLOSURES
Although these credit ratings have been issued in a non-EU country
which has not been recognized as endorsable at this date, the credit
rating is deemed "EU qualified by extension" and may still
be used by financial institutions for regulatory purposes until 30 April
2012. Further information on the EU endorsement status and on the
Moody's office that has issued a particular Credit Rating is available
on www.moodys.com.
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.
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.
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.
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.
Sean Jones
Senior Vice President
Financial Institutions Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Robert Young
MD - Financial Institutions
Financial Institutions Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Moody's reviews for downgrade the ratings of North American bank subsidiaries of European banks