–Adds ‘No Comment’ From Moody”s In 3rd Paragraph
PARIS (MNI) – Moody’s has decided to cut the ratings of Spanish
banks by two to three notches and will issue a statement after markets
close on Wall Street on Monday, the Spainish financial daily Expansion
reported, citing Spanish banking sources.
“The communicated to us a downgrade of two to three notches for
almost all [banks]. They aren’t looking at the financial situations of
individual banks. They are not discriminating,” the publication cited
one source as saying.
According to the report, Moody’s is to make the announcement
sometime after 2100 GMT/1700 ET today. A Moody’s spokeswoman declined to
comment.
The paper noted that normally banks of a given country are
automatically downgraded when their sovereigns are, and that they
normally have a rating that is inferior to the government’s. Because
Spain’s sovereign rating is currently only one notch above the lower end
of the investment grade category, most of the banks are likely to get
junk ratings, the report said.
Possible exceptions are Spain’s largest banks: Santander, BBVA and
CaixaBank, which “could possibly avoid falling to that level,” Expansion
said.
Moody’s downgraded 16 Spanish banks by one to three notches on May
17, following its downgrade of Spanish sovereign debt a few days
earlier. Last week, Moody’s downgraded 15 large banks worldwide, citing
their elevated exposure to trading in global markets.
Earlier today, Spain’s Economy Minister Luis de Guindos formally
requested recapitalization aid for Spain’s banks in a letter to
Eurogroup President Jean-Claude Juncker. The aid request was expected
after the Eurogroup said earlier this month that it would make up to
E100 billion available for Spanish banks to recapitalize — money that
would be loaned via a government entity and thus add to Spain’s mounting
debt load.
–Paris newsroom, +331-42-71-55-40; bwolfson@marketnews.com
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