Moody’s downgrades SocGens’ debt and deposit ratings by one notch to Aa3 from Aa2
- Outlook for long-term debt rating is negative
- Believes that SocGen has a level of capital, consistent with its BFSR, that can absorb potential losses it is likely to incur over time on its Greek govt bonds
- Assessment incorporates loss assumptions that are significantly higher than the impairments the bank has already recognised
- Considers SocGen to be sufficiently profitable and capitalized that it can absorb further potential related losses
- Residual risk to group from remaining Greek govt bonds exposure is modest
- Holdings of other non investment-grade peripheral European govt bonds are not a major concern
- Prime-1 short-term ratings have been affirmed
Also downgrades Credit Agricole’s long-term debt and deposit ratings by one notch to Aa2 from Aa1
Moody’s to release statement on BNP Paribas rating. Gee, just can’t wait.
The French bank downgrades come as no surprise. EUR/USD experienced a slight dip on the news, but has bounced back to pre announcement levels, presently at 1.3638.
UPDATE: Moody’s maintains review for downgrade to BNP Paribas’ Aa2 long-term ratings to consider impact of funding challenges on credit profile