Moody’s downgrades Anglo
(28th September 2010 – Europe) Moody’s Investor Service has downgraded troubled lender Anglo Irish Bank’s senior debt by three notches.
The ratings agency reduced the bank’s unguaranteed senior debt from A3 to Baa3.
The bank’s dated-subordinated debt was also cut, dropping from Ba1 to Caa1 because the bank is expected to require further government support.
The review came as a result of the Irish government’s plans to separate state-owned Anglo Irish Bank into an asset-recovery bank and a funding bank holding deposits.
The ratings agency said the plans could ‘increase the government's options to share the burden’ of support with the bank's creditors.
The ratings agency confirmed that the risk of the government not supporting the debt was ‘very small’.
Moody’s also said that if the government guaranteed the debt after the bank is reorganised it may raise the ratings.
The bank’s dated-subordinated debt was also cut, dropping from Ba1 to Caa1 because the bank is expected to require further government support.
The review came as a result of the Irish government’s plans to separate state-owned Anglo Irish Bank into an asset-recovery bank and a funding bank holding deposits.
The ratings agency said the plans could ‘increase the government's options to share the burden’ of support with the bank's creditors.
The ratings agency confirmed that the risk of the government not supporting the debt was ‘very small’.
Moody’s also said that if the government guaranteed the debt after the bank is reorganised it may raise the ratings.
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