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Rating Action:

Moody's takes rating actions on Portuguese banks

24 Jul 2019

Rating actions follow the change in the country's Macro Profile to 'Moderate+' from 'Moderate'

Madrid, July 24, 2019 -- Moody's Investors Service has today taken rating actions on six Portuguese banking groups, prompted by the rating agency's change of the banking Macro Profile of Portugal (Baa3 stable) to "Moderate+" from "Moderate" in combination with the continued improvement in the banks' credit fundamentals, notably asset risk. For a detailed analysis of Portugal's Macro Profile please click on the following link: http://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1184637

Among the actions taken today by Moody's on the affected banks are the following:

- Upgrade of Caixa Geral de Depositos, S.A.'s (CGD) deposit ratings to Baa3/Prime-3 from Ba1/Not Prime and affirmation of the bank's senior unsecured debt ratings at Ba1. CGD's Baseline Credit Assessment (BCA) and adjusted BCA were upgraded to ba1 from ba2. The outlook on the long-term deposit ratings remains stable, the outlook on the senior unsecured debt ratings has been changed to stable from negative.

- Upgrade of Banco Comercial Portugues, S.A.'s (BCP) deposit ratings to Baa3/Prime-3 from Ba1/Not Prime and upgrade of the bank's senior unsecured programme rating to (P)Ba1 from (P)Ba2. BCP's BCA and adjusted BCA were upgraded to ba2 from ba3. The outlook on the long-term deposit ratings remains stable.

- Upgrade of Banco Santander Totta S.A.'s (BST) long-term deposit ratings to Baa1 from Baa2 and affirmation of the bank's long-term senior unsecured debt ratings at Baa3. BST's BCA was upgraded to baa3 from ba2 and its adjusted BCA to baa2 from baa3. The outlook on the long-term deposit ratings remains stable, the outlook on the senior unsecured debt ratings has been changed to stable from negative.

- Upgrade of Novo Banco S.A.'s (Novo Banco) long-term deposit ratings to B2 from Caa1 and affirmation of the long-term senior unsecured debt ratings at Caa2. Novo Banco's BCA and adjusted BCA were upgraded to caa1 from caa2. The outlook on the long-term deposit ratings remains positive, the outlook on the senior unsecured debt ratings has been changed to positive from negative.

- Affirmation of Banco BPI S.A.'s (BPI) deposit ratings at Baa1/Prime-2 and of its senior unsecured programme rating at (P)Ba1. BPI's BCA was upgraded to baa3 from ba1, and its adjusted BCA was affirmed at baa3. The outlook on the long-term deposit rating remains stable.

Caixa Economica Montepio Geral, CEB, S.A.'s (Banco Montepio) long-term deposit rating of B3 was placed on review for upgrade and the bank's senior unsecured programme rating of (P)B3 was placed on review for downgrade. Banco Montepio's BCA and adjusted BCA of caa1 were also placed on review for upgrade.

A full list of affected ratings can be found at the end of this press release.

The main driver for today's rating actions is the banking system's improved operating environment, in particular the significant deleveraging of the private sector. The strengthening of Portugal's Macro Profile has led Moody's to review the standalone credit profiles of its rated Portuguese banks, taking into consideration the degree of improvement in their financial fundamentals.

Further, the rating actions on CGD, BST, Novo Banco, and Banco Montepio reflect Portugal's new legal framework that was implemented in March 2019, and which establishes full depositor preference over senior unsecured debt instruments in the event of a bank resolution, in combination with these banks' medium-term funding plans when available. Under Moody's Advanced Loss Given Failure (LGF) analysis, the revised legal ranking has reduced the volume of loss-absorbing liabilities that rank alongside senior unsecured debt, increasing the loss rates for senior creditors in the event of failure.

The rating agency took rating actions on BCP's and BPI's ratings earlier this year to reflect the impact of the depositor preference framework in combination with Moody's consideration of the banks' medium term funding plans.

RATINGS RATIONALE

(1) CHANGE IN THE MACRO PROFILE TO 'MODERATE+' FROM 'MODERATE' REFLECTS IMPROVING OPERATING ENVIRONMENT IN PORTUGAL AND EXERTS UPWARD PRESSURE ON BANKS' RATINGS

Moody's rating methodology for banks includes an assessment of each individual country's operating environment, expressed as a Macro Profile, which is designed to capture system-wide factors that are predictive of the propensity of banks to fail. The Macro Profile assigned to each bank informs the financial factors, which are key inputs into the determination of each bank's BCA.

Moody's has changed Portugal's Macro Profile to "Moderate+" from "Moderate" to reflect the improvements in the systems' credit conditions that have been driven by the deleveraging of the private sector.

In improving Portugal's Macro Profile, Moody's has taken into account the significant reduction in the debt burden of the domestic private sector over the past few years. Starting from leverage levels materially above the euro area average, the private debt outstanding to gross domestic product ratio fell to 169% as of the end of 2018, which is now broadly in line with the euro area average after declining by almost 29 percentage points over the last three years.

Consequently, Moody's assessment of more favorable credit conditions for banks in Portugal, in combination with ongoing improvements in other credit fundamentals, notably asset quality, has resulted in one or two-notch BCA upgrades for the banks affected by today's rating actions, with the exception of Banco Montepio, whose BCA has been placed on review for upgrade.

(2) PORTUGAL'S DEPOSITOR PREFERENCE FRAMEWORK

On 13 March 2019, the Portuguese government transposed into national legislation the European Union's (EU) Directive 2017/2399 and modified the priority of claims laid out in Portuguese insolvency law. The new insolvency hierarchy in Portugal gives preference to all bank depositors over other unsecured creditors in a bank insolvency or resolution, including junior depositors such as financial institutions, public authorities and large corporates.

This new framework increases the protection from which junior deposits benefit as they no longer rank pari passu with senior unsecured liabilities, thereby reducing expected loss-given-failure for rated deposits. By the same token, the volume of loss-absorbing liabilities that would rank alongside senior unsecured debt would be reduced and therefore the loss rates for senior creditors in the event of failure would increase.

Moody's has considered the impact in its Advanced LGF analysis of this new framework in combination with the rating agency's consideration of the banks' medium-term funding plans where available, which has resulted in higher uplift for deposits and lower uplift for senior debt for the majority of the rated banks.

(3) SPECIFIC ANALYTICAL FACTORS FOR THE AFFECTED BANKS

-- CAIXA GERAL DE DEPOSITOS, S.A. (CGD)

The one notch upgrade of CGD's deposit ratings to Baa3/Prime-3 from Ba1/Not Prime and the affirmation of its senior unsecured debt ratings at Ba1 reflects: (1) the upgrade of the bank's BCA and adjusted BCA to ba1 from ba2; (2) Moody's Advanced LGF analysis, which now results in a one-notch uplift for the deposit ratings and a negative notch for the senior debt respectively, from no uplift previously; and (3) unchanged moderate government support assumptions for CGD, as Portugal's largest bank, which provides a one-notch uplift for the senior debt ratings and no uplift for the deposit ratings, that are now rated at the same level as the Portuguese sovereign (Baa3 stable).

CGD's BCA of ba1 reflects the improved Macro Profile in combination with the bank's sound progress in delivering on its 2017-2020 strategic plan. As a result, at end-March 2019, CGD's fully-loaded Common Equity Tier 1 (CET1) ratio increased to 15% from 13.6% a year earlier while its non-performing loan (NPL) ratio declined to 7.8% from 11.4% a year earlier, which compares to a system average of 9.6% (source: European Banking Authority Q1 2019). CGD's BCA also reflects the bank's improving albeit still high level of problematic assets and modest profitability levels.

The outlook on CGD's deposit and senior unsecured debt ratings is stable, reflecting Moody's expectation that the bank's credit profile and degree of protection for its senior creditors from the stock of bail-in-able liabilities will not materially change over the next 12-18 months. The current outlook already incorporates our expectation that CGD will continue to issue bail-in-able debt over the next few years to meet its required MREL target.

-- BANCO COMERCIAL PORTUGUES, S.A. (BCP)

The one-notch upgrade of BCP´s long-term deposit ratings to Baa3 from Ba1 and of the long-term senior unsecured debt ratings of its supported entity BCP Finance Bank, Ltd. to Ba1 from Ba2 was driven by: (1) the upgrade of the bank's BCA and adjusted BCA to ba2 from ba3; (2) Moody's Advanced LGF analysis, which now results in a two-notch uplift for deposits (from one notch previously) and no uplift for senior debt, which is unchanged; and (3) maintaining Moody's assessment of a moderate probability of government support for BCP, as Portugal's second largest bank, which results in a one-notch uplift for senior debt (unchanged) and no uplift (from one notch previously) for deposits, that are now rated at the same level as the Portuguese sovereign.

The upgrade of BCP's BCA to ba2 reflects the improved Macro Profile in Portugal, which should help the bank to deliver on its 2021 strategic targets. The bank's BCA reflects its enhanced credit profile as a result of the de-risking strategy followed over recent years, in particular: (1) its declining non-performing assets (NPA) ratio, which stood at 13.4% at end-December 2018, down from 17.9% a year earlier; as well as (2) its stronger risk-absorption capacity against the still weak asset-risk profile, with the Texas ratio (measured as NPAs / shareholders' equity + loan-loss and real estate reserves) declining to 79% from 99% a year earlier. Further, BCP's BCA also reflects the bank's improving albeit still modest domestic bottom-line profitability, which is enhanced by the positive contribution from the bank's international operations.

The outlook on BCP's long-term deposit and senior debt ratings is stable, incorporating Moody's expectation that the bank will be able to maintain a gradual improvement on its credit profile, namely by further reducing its stock of problematic assets. The current outlook already incorporates our expectation that BCP will continue to issue bail-in-able debt until June 2022 to meet its assigned MREL requirement.

-- BANCO SANTANDER TOTTA S.A. (BST)

The upgrade of BST's long-term deposit ratings to Baa1 from Baa2 and affirmation of its long-term senior unsecured debt ratings at Baa3 reflects: (1) the upgrade of the bank's BCA to baa3 from ba2; (2) maintaining a high probability of affiliate support from Banco Santander S.A. (Spain) (deposits A2 stable/senior unsecured debt A2 stable; BCA baa1), that results in a one-notch uplift to the baa2 adjusted BCA; and (3) the result from Moody's Advanced LGF analysis that leads to a one-notch uplift (unchanged) for the deposit ratings and a negative notch for the senior debt ratings (from no uplift previously). Moody's assigns a low probability of government support for BST's deposit and senior debt ratings resulting in no uplift for these ratings.

BST's BCA of baa3 reflects the improved Macro Profile in combination with the bank's strengthened credit profile after it successfully completed the integration of Banco Popular Portugal S.A. (BAPOP) whose acquisition became effective on 27 December 2017. In particular, Moody's has considered the bank's: (1) improved asset risk metrics (i.e. the NPA ratio declined to 6.6% at end-December 2018 from 8.2% a year earlier); (2) sound profitability levels (the net profit over tangible assets stood at 0.9% at end-December 2018); and (3) resilient capital ratios that should improve further as the bank continues to make progress in de-risking and through earnings retention.

The outlook on BST's deposit and senior unsecured debt ratings is stable, reflecting Moody's expectation that the bank's credit profile and degree of protection for its senior creditors from the stock of bail-in-able liabilities will not materially change over the next 12-18 months.

-- NOVO BANCO, S.A.

The two-notch upgrade of Novo Banco's long-term deposit ratings to B2 from Caa1 and the affirmation of the bank's long-term senior unsecured debt ratings at Caa2 reflects (1) the upgrade of the bank's BCA and adjusted BCA to caa1 from caa2; (2) Moody's Advanced LGF analysis, which now results in a two-notch uplift for the deposit ratings (versus one notch previously) and a negative notch for senior debt (from no uplift previously); and (3) Moody's unchanged assumption of a low probability of government support, resulting in no further rating uplift.

Novo Banco's BCA of caa1 reflects the improved Macro Profile and progress in de-risking its balance sheet. The bank's BCA also reflects Moody's consideration of persistent solvency challenges, determined by a declining but still very high level of problematic assets (the NPA ratio stood at 29.9% at end-December 2018) and very weak profitability levels. Despite the capital support mechanism currently in place for the bank, there are significant challenges to Novo Banco's credit profile, with limited visibility into the strategy that will be implemented to ensure long-term sustainability of its franchise.

The positive outlook reflects the positive pressure that could develop on Novo Banco's deposit and senior unsecured debt ratings if it starts to successfully deliver on the key targets of its restructuring plan: (1) a substantial improvement in its asset-risk profile, (2) a transformation of its operations, and (3) an improvement of its revenue generation capacity.

-- BANCO BPI S.A. (BPI)

The affirmation of BPI's long-term deposit ratings at Baa1 and of the long-term senior unsecured programme ratings at (P)Ba1 was driven by: (1) the upgrade of the BCA to baa3 from ba1; (2) maintaining a high likelihood of affiliate support from CaixaBank S.A. (deposits A3 stable/senior unsecured debt Baa1 stable; BCA baa3) that now provides no uplift (from a one-notch uplift previously) and thus results in an unchanged adjusted BCA of baa3; and (3) Moody's Advanced LGF analysis that provides an unchanged two-notch uplift for deposits and a negative notch for senior debt from the bank's adjusted BCA. There is no government support uplift for these ratings, given Moody's assumption that the probability of such support is low.

BPI's BCA of baa3 reflects the improved Macro Profile in combination with the bank's strengthened credit profile following the progressive alignment of BPI's business strategies and operations with those of its parent Caixabank. In particular, Moody's has considered: (1) the bank's enhanced capital levels, which are, however, constrained by the risks stemming from BPI's Angolan exposure (fully-loaded CET1 ratio increased to 13.8% at end-December 2018, up from 12.3% a year earlier); (2) its low level of NPAs, with Moody's estimated NPA ratio standing at 4.4%, well below the Portuguese system average; and (3) its improving profitability metrics, with increased domestic bottom-line earnings offsetting the lower contribution of the international activities.

The stable outlook on BPI´s long-term deposit ratings reflects our view that the expected improvement in its financial fundamentals is already captured in the bank's current rating levels.

-- CAIXA ECONOMICA MONTEPIO GERAL, CAIXA ECONOMICA BANCARIA, S.A. (BANCO MONTEPIO)

The review for upgrade of Banco Montepio's caa1 BCA and adjusted BCA was prompted by the improvement in Portugal's Macro Profile. The review for upgrade also reflects the potential benefit to the bank's weak credit fundamentals if Banco Montepio makes further progress in terms of de-risking its balance sheet and strengthening of its solvency levels, together with a recovery in its very weak revenue generation capacity.

The review for upgrade of Banco Montepio's B3 long-term deposit ratings reflects: (1) the review for upgrade of the bank's caa1 adjusted BCA; and (2) the benefit for these ratings of the current depositor preference framework in Portugal.

The review for downgrade of Banco Montepio's (P)B3 senior unsecured programme ratings balances the benefits of a potential improvement in the bank's credit profile and the downward pressure that stems from the depositor preference framework, which has resulted in an increased loss given failure for this class of debt.

Moody's expects to conclude the rating review following the assessment of Banco Montepio's medium-term strategy and measures that are being considered to reinforce its credit profile. In concluding the rating review, the rating agency will also assess the evolution of Banco Montepio's funding structure and its effect on the outcome of Moody's Advanced LGF analysis.

FACTORS THAT COULD LEAD TO AN UPGRADE

Banks' standalone BCAs could be upgraded as a consequence of a further material decline in the stock of problematic assets, coupled with a sustained recovery of recurrent profitability levels. The banks' BCAs could also be upgraded on the back of stronger Tangible Common Equity (TCE) levels.

As the banks' debt and deposit ratings are linked to the standalone BCA, any change to the BCA would likely also affect these ratings.

The bank's deposit and senior debt ratings could also experience upward pressure from movements in the loss-given-failure faced by these securities.

FACTORS THAT COULD LEAD TO A DOWNGRADE

Downward pressure on the banks' BCAs could develop as a result of: (1) a reversal in current asset risk trends with an increase in the stock of non-performing loans (NPLs) and/or other problematic exposures; (2) banks failing to maintain their risk-absorption capacity due to asset quality weakening and/or additional provisioning efforts in excess of capital generation capacity; and/or (3) a deterioration in the banks' liquidity position.

As the banks' debt and deposit ratings are linked to the standalone BCA, any change to the BCA would likely also affect these ratings.

The bank's deposit and senior debt ratings could also experience downward pressure from movements in the loss-given-failure faced by these securities.

LIST OF AFFECTED RATINGS

Issuer: Caixa Geral de Depositos, S.A.

..Upgrades:

....Long-term Counterparty Risk Ratings, upgraded to Baa1 from Baa3

....Short-term Counterparty Risk Ratings, upgraded to P-2 from P-3

....Long-term Bank Deposit Ratings, upgraded to Baa3 from Ba1, outlook remains Stable

....Short-term Bank Deposits, upgraded to P-3 from NP

....Baseline Credit Assessment, upgraded to ba1 from ba2

....Adjusted Baseline Credit Assessment, upgraded to ba1 from ba2

....Subordinate Regular Bond/Debenture, upgraded to Ba2 from Ba3

....Subordinate Medium-Term Note Program, upgraded to (P)Ba2 from (P)Ba3

....Preferred Stock Non-cumulative, upgraded to B1(hyb) from B2(hyb)

..Affirmations:

....Long-term Counterparty Risk Assessment, affirmed Baa2(cr)

....Short-term Counterparty Risk Assessment, affirmed P-2(cr)

....Senior Unsecured Regular Bond/Debenture, affirmed Ba1, outlook changed to Stable from Negative

....Senior Unsecured Medium-Term Note Program, affirmed (P)Ba1

....Commercial Paper, affirmed NP

....Other Short Term, affirmed (P)NP

..Outlook Action:

....Outlook changed to Stable from Stable(m)

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

..Upgrades:

....Long-term Counterparty Risk Ratings, upgraded to Baa1 from Baa3

....Short-term Counterparty Risk Ratings, upgraded to P-2 from P-3

....Subordinate Regular Bond/Debenture, upgraded to Ba2 from Ba3

....Subordinate Medium-Term Note Program, upgraded to (P)Ba2 from (P)Ba3

..Affirmations:

....Long-term Counterparty Risk Assessment, affirmed Baa2(cr)

....Short-term Counterparty Risk Assessment, affirmed P-2(cr)

....Senior Unsecured Regular Bond/Debenture, affirmed Ba1, outlook changed to Stable from Negative

....Senior Unsecured Medium-Term Note Program, affirmed (P)Ba1

....Commercial Paper, affirmed NP

....Other Short Term, affirmed (P)NP

..Outlook Action:

....Outlook changed to Stable from Negative

Issuer: Banco Comercial Portugues, S.A.

..Upgrades:

....Long-term Counterparty Risk Ratings, upgraded to Baa2 from Baa3

....Short-term Counterparty Risk Ratings, upgraded to P-2 from P-3

....Long-term Bank Deposits , upgraded to Baa3 from Ba1, outlook remains Stable

....Short-term Bank Deposits, upgraded to P-3 from NP

....Long-term Counterparty Risk Assessment, upgraded to Baa2(cr) from Baa3(cr)

....Short-term Counterparty Risk Assessment, upgraded to P-2(cr) from P-3(cr)

....Baseline Credit Assessment, upgraded to ba2 from ba3

....Adjusted Baseline Credit Assessment, upgraded to ba2 from ba3

....Senior Unsecured Medium-Term Note Program, upgraded to (P)Ba1 from (P)Ba2

....Junior Senior Unsecured Medium-Term Note Program, upgraded to (P)Ba3 from (P)B1

....Subordinate Regular Bond/Debenture, upgraded to Ba3 from B1

....Subordinate Medium-Term Note Program, upgraded to (P)Ba3 from (P)B1

....Preferred Stock Non-cumulative, upgraded to B2(hyb) from B3(hyb)

..Affirmation:

....Other Short Term, affirmed (P)NP

..Outlook Action:

....Outlook remains Stable

Issuer: BCP Finance Bank, Ltd.

..Upgrade:

....Backed Senior Unsecured Regular Bond/Debenture, upgraded to Ba1 from Ba2, outlook remains Stable

..Affirmation:

....Backed Commercial Paper, affirmed NP

..Outlook Action:

....Outlook remains Stable

Issuer: Banco Comercial Portugues, SA, Macao Br

..Upgrades:

....Long-term Counterparty Risk Ratings, upgraded to Baa2 from Baa3

....Short-term Counterparty Risk Ratings, upgraded to P-2 from P-3

....Long-term Bank Deposits, upgraded to Baa3 from Ba1, outlook remains Stable

....Short-term Bank Deposits, upgraded to P-3 from NP

....Long-term Counterparty Risk Assessment, upgraded to Baa2(cr) from Baa3(cr)

....Short-term Counterparty Risk Assessment, upgraded to P-2(cr) from P-3(cr)

..Outlook Action:

....Outlook remains Stable

Issuer: BCP Finance Company

..Upgrade:

....Backed Subordinate Shelf, upgraded to (P)Ba3 from (P)B1

..No Outlook assigned

Issuer: Banco Santander Totta S.A.

..Upgrades:

....Long-term Bank Deposits, upgraded to Baa1 from Baa2, outlook remains Stable

....Long-term Counterparty Risk Assessment, upgraded to Baa1(cr) from Baa2(cr)

....Baseline Credit Assessment, upgraded to baa3 from ba2

....Adjusted Baseline Credit Assessment, upgraded to baa2 from baa3

..Affirmations:

....Long-term Counterparty Risk Rating, affirmed Baa1

....Short-term Counterparty Risk Rating, affirmed P-2

....Short-term Bank Deposits, affirmed P-2

....Short-term Counterparty Risk Assessment, affirmed P-2(cr)

....Senior Unsecured Regular Bond/Debenture, affirmed Baa3, outlook changed to Stable from Negative

....Senior Unsecured Medium-Term Note Program, affirmed (P)Baa3

....Commercial Paper, affirmed P-3

....Other Short Term, affirmed (P)P-3

..Outlook Action:

....Outlook changed to Stable from Stable(m)

Issuer: TOTTA (IRELAND) p.l.c.

..Affirmation:

....Backed Commercial Paper, affirmed P-3

..No Outlook assigned

Issuer: Novo Banco, S.A.

..Upgrades:

....Long-term Counterparty Risk Ratings, upgraded to B1 from B2

....Long-term Bank Deposits, upgraded to B2 from Caa1, outlook remains Positive

....Long-term Counterparty Risk Assessment, upgraded to B1(cr) from B2(cr)

....Baseline Credit Assessment, upgraded to caa1 from caa2

....Adjusted Baseline Credit Assessment, upgraded to caa1 from caa2

....Subordinate Regular Bond/Debenture, upgraded to Caa2 from Caa3

..Affirmations:

....Short-term Counterparty Risk Ratings, affirmed NP

....Short-term Bank Deposits, affirmed NP

....Short-term Counterparty Risk Assessment, affirmed NP(cr)

....Senior Unsecured Regular Bond/Debenture, affirmed Caa2, outlook changed to Positive from Negative

....Commercial Paper, affirmed NP

..Outlook Action:

....Outlook changed to Positive from Positive(m)

Issuer: NB Finance Ltd.

..Affirmations:

....Backed Senior Unsecured Regular Bond/Debenture, affirmed Caa2, outlook changed to Positive from Negative

..Outlook Action:

....Outlook changed to Positive from Negative

Issuer: Novo Banco S.A., Luxembourg Branch

..Upgrades:

....Long-term Counterparty Risk Ratings, upgraded to B1 from B2

....Long-term Bank Deposits, upgraded to B2 from Caa1, outlook remains Positive

....Long-term Counterparty Risk Assessment, upgraded to B1(cr) from B2(cr)

..Affirmations:

....Short-term Counterparty Risk Ratings, affirmed NP

....Short-term Bank Deposits, affirmed NP

....Short-term Counterparty Risk Assessment, affirmed NP(cr)

....Senior Unsecured Regular Bond/Debenture, affirmed Caa2, outlook changed to Positive from Negative

..Outlook Action:

....Outlook changed to Positive from Positive(m)

Issuer: Novo Banco, S.A., Cayman Branch

..Upgrades:

....Long-term Counterparty Risk Ratings, upgraded to B1 from B2

....Long-term Bank Deposits, upgraded to B2 from Caa1, outlook remains Positive

....Long-term Counterparty Risk Assessment, upgraded to B1(cr) from B2(cr)

..Affirmations:

....Short-term Counterparty Risk Ratings, affirmed NP

....Short-term Bank Deposits, affirmed NP

....Short-term Counterparty Risk Assessment, affirmed NP(cr)

..Outlook Action:

....Outlook remains Positive

Issuer: Banco BPI S.A.

..Upgrade:

....Baseline Credit Assessment, upgraded to baa3 from ba1

..Affirmations:

....Long-term Counterparty Risk Rating, affirmed Baa1

....Short-term Counterparty Risk Rating, affirmed P-2

....Long-term Bank Deposits, affirmed Baa1, outlook remains Stable

....Short-term Bank Deposits, affirmed P-2

....Long-term Counterparty Risk Assessment, affirmed Baa2(cr)

....Short-term Counterparty Risk Assessment, affirmed P-2(cr)

....Long-term Issuer Rating, affirmed Ba1, outlook remains Stable

....Adjusted Baseline Credit Assessment, affirmed baa3

....Senior Unsecured Medium-Term Note Program, affirmed (P)Ba1

....Junior Senior Unsecured Medium-Term Note Program, affirmed (P)Ba1

....Subordinate Medium-Term Note Program, affirmed (P)Ba1

....Junior Subordinate Medium-Term Note Program, affirmed (P)Ba2

....Other Short Term, affirmed (P)NP

..Outlook Action:

....Outlook remains Stable

Issuer: Caixa Economica Montepio Geral, CEB, S.A.

..Placed on Review for Upgrade:

....Long-term Counterparty Risk Rating, currently B1

....Long-term Bank Deposits, currently B3, outlook changed to Ratings under Review from Positive

....Long-term Counterparty Risk Assessment, currently B1(cr)

....Baseline Credit Assessment, currently caa1

....Adjusted Baseline Credit Assessment, currently caa1

....Subordinate Regular Bond/Debenture, currently Caa2

....Subordinate Medium-Term Note Program, currently (P)Caa2

....Junior Subordinate Medium-Term Note Program, currently (P)Caa3

..Placed on Review for Downgrade:

....Senior Unsecured Medium-Term Note Program, currently (P)B3

..Affirmations:

....Short-term Counterparty Risk Rating, affirmed NP

....Short-term Bank Deposits, affirmed NP

....Short-term Counterparty Risk Assessment, affirmed NP(cr)

....Other Short Term, affirmed (P)NP

..Outlook Action:

....Outlook changed to Rating under Review from Positive

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Banks published in August 2018. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain 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 certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain 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.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

The below contact information is provided for information purposes only. Please see 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 the ratings.

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.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Maria Jose Mori
VP - Senior Credit Officer
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
Client Service: 44 20 7772 5454

Carola Schuler
MD - Banking
Financial Institutions Group
JOURNALISTS: 44 20 7772 5456
Client Service: 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
Client Service: 44 20 7772 5454

No Related Data.
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