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Announcement:

Moody's takes action on La Caixa and Criteria following restructuring announcement

28 Jan 2011

Madrid, January 28, 2011 -- Moody's Investors Service has taken the following actions on Caja de Ahorros y Pensiones de Barcelona ("La Caixa", rated Aa2 on review for possible downgrade/Prime-1/B- and Criteria CaixaCorp (Criteria, rated A2), in response to the announcement that La Caixa will transfer its banking activities to a commercial bank (CaixaBank, former Criteria):

Moody's has placed on review for possible upgrade the A2 long-term issuer rating of Criteria CaixaCorp.

At the same time, Moody's has maintained the existing review for possible downgrade of La Caixa's Aa2 senior and the Aa3 subordinated ratings; and it has affirmed its B- BFSR and the Baa2 on its preference shares, both with a negative outlook. The short-term deposit rating was affirmed at Prime-1.

DETAILS OF THE TRANSACTION

On January 27, the board of directors of both La Caixa and Criteria agreed on the transformation of La Caixa into a bank by transferring its assets and liabilities to Criteria, with the exception of its real estate assets and € 8.2 billion of net long-term debt. In exchange, Criteria will transfer to La Caixa part of its industrial stakes and € 2 billion new shares of the entity. Subsequent to these transactions, Criteria will be converted into a bank from its current holding company status. La Caixa, which will maintain its savings bank charter, will continue to manage its existing social welfare fund.

Once the transfer is effective, CaixaBank will have a balance sheet of € 272 billion (pro-forma at end-September 2010).

The transaction is subject to the approval of La Caixa's general assembly and of Criteria shareholders' meeting which are expected to take place in April and in May, respectively.

RATINGS RATIONALE

REVIEW FOR POSSIBLE UPGRADE OF CRITERIA'S LONG-TERM ISSUER RATING

Moody's decision of placing Criteria's long-term issuer rating on review for possible upgrade follows the agreed conversion of Criteria into a bank (CaixaBank) to which la Caixa will transfer all of its banking business.

With €272 billion in assets, CaixaBank enjoys a pro-forma core capital ratio of 9.9% -- which is stronger than that of the existing group of 8.6% -- that will increase to 10.9% following the issuance of €1.5 billion mandatory convertible bonds that is expected to take place in June 2011. The stronger credit profile of CaixaBank versus La Caixa is furher reinforced by the fact that La Caixa will not transfer to CaixaBank its portfolio of real estate assets which are likely to be subject to further impairments.

The rating review will focus on any changes to the current transformation plan, which is still subject to approval by the General Assembly of La Caixa and the shareholder's meeting of Criteria. Moody's expects the transaction to close in July 2011. In the absence of any significant deviations from the transformation plan or other material performance changes of the credit profile of CaixaBank, Moody's said that the new bank would likely be rated at the same level as it currently rates La Caixa, at B- (mapping into a standalone rating of A1 on the long-term rating scale)/Prime-1.

REVIEW FOR POSSIBLE DOWNGRADE OF LA CAIXA'S RATINGS UNCHANGED

Although La Caixa will maintain its current legal status of a savings bank, it will neither take deposits nor carry out any banking activity. This transformation produces a "de facto" structural subordination of La Caixa's current creditors to those of the operating bank (i.e. CaixaBank) as the payment of La Caixa's debt will be largely dependent on the dividends upstreamed by CaixaBank which will be La Caixa's most significant revenue source.

This dependence is somewhat mitigated by the long-term maturities of La Caixa's debt (€ 2 billion of government guaranteed debt in 2012 and €6.2 billion of subordinated debt maturing mainly in 2019 and 2020) and the liquidity support that La Caixa will receive from CaixaBank to allow the repayment of the €2 billion debt that matures in 2012.

Typically Moody's rates such holding company structures one notch below the rating of its operating company to reflect the risk of structural subordination. The review for possible downgrade of LaCaixa's rating will focus on these risks and also on the potential support available to the holding company.

Furthermore, Moody's stated that La Caixa's senior and dated subordinated debt ratings as wells its deposit ratings have been under review for possible downgrade since December 20, 2010, aligned with other 30 Spanish banks that were placed 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. Should the sovereign review conclude before the closure of this transaction, this may well result in the review being kept open beyond any rating action on the Kingdom of Spain.

La Caixa's B- BFSR has been affirmed at current level, while maintaining its negative outlook. This stand-alone rating will likely be withdrawn at the time of transformation, as the entity will seize to take deposits.

The Prime-1 short-term rating of La Caixa has been affirmed at current level, and will also bewithdrawn at the time of transformation as La Caixa will not have any short-term debt outstanding.

PREVIOUS RATING ACTIONS & PRINCIPAL METHODOLOGIES

Moody's last rating action on Criteria CaixaCorp was implemented on 08 July 2010, when the rating agency assigned a first-time A2 issuer rating to the bank, with stable outlook.

Moody's last rating action on La Caixa was implemented on 20 December 2010, when the bank's senior and dated subordinated debt ratings as wells its deposit ratings have been placed under review for possible downgrade.

The principal methodology used in rating Criteria was "Moody's Global Investment Holding Companies", published in October 2007 and available on www.moodys.com. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found on Moody's website.

The principal methodologies used in rating La Caixa are Moody's "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, both of which are available on www.moodys.com. Other methodologies and factors that may have been considered in the process of rating these issuers can also be found on Moody's website.

Headquartered in Barcelona, Spain, Criteria CaixaCorp is a holding company with investments in financial and service companies. Its portfolio had a gross asset value of EUR24 billion at the end of December 2009.

Caja de Ahorros y Pensiones de Barcelona is headquartered in Barcelona, Spain. At 31 December 2010 it had total assets of EUR 286 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 Cabanyes
Senior Vice President
Financial Institutions Group
Moody's Investors Service Espana, S.A.
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 takes action on La Caixa and Criteria following restructuring announcement
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