Moody’s downgrades eight Portuguese banks
MOODY’S Investors Service yesterday cut the ratings of eight Portuguese banks by between one and two notches and mostly with a negative outlook, a day after a two-notch downgrade of the country’s sovereign debt.
In a statement, the ratings agency cited “the government’s reduced ability to support its banks” and the fact that top banks have issued debt backed by state guarantees since the onset of the global crisis in 2008.
All rated government-backed debt issues of Portuguese banks have been downgraded to A1 from Aa2, with a stable outlook, in line with the Portuguese government’s debt rating.
The country’s largest listed bank, Millennium bcp, suffered a two-notch downgrade to A3/Prime-2 with a negative outlook, which Moody’s attributed to the bank’s weaker financial strength compared with higher-rated peers. State-run Caixa Geral de Depositos lost just one notch to A1/Prime-1.