Moody’s changes Barclays Bank’s debt and deposit ratings
Moody’s Investors Service has changed the outlook for Barclays Bank’s debt and deposit ratings (Senior at Aa1) from stable to negative, and downgraded the bank’s Bank Financial Strength Rating (BFSR) to B from B+. The outlook on the BFSR remains negative.
The outlook on the bank’s subordinated debt ratings as well as the backed long-term senior and subordinated debt and deposit ratings of Barclays’ rated subsidiaries has changed to negative in line with the parent. The deposit rating of Barclays Bank Ireland Plc has changed from Aa2 to Aa3, due to the change in the BFSR of the parent, whose support is factored into its rating.
Moody’s said the rating action reflects Moody’s concern that both earnings and capitalisation levels could come under pressure from Barclays’ exposure to i) sizeable positions in both the trading and banking book of credit market exposures (namely ABS CDO Super Senior exposures of GBP3.9bn, Other Sub-prime and Alt-A of GBP8.7bn, Commercial Mortgages of GBP12.6bn, and leveraged finance commitments of GBP7.3bn ii) the weakening economies of the UK primarily, but also Spain, where cyclical pressure on asset quality may exacerbate the pressure on earnings. — www.theasianbanker.com (May 16 2008)–