| Wed 29 Feb 2012, 16:32 | | BIABS - Absa Bank Limited - Rating downgrade of five South African banks by |
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JSE
BIABS
BIABS - Absa Bank Limited - Rating downgrade of five South African banks by
Moody`s Investors Service
Absa Bank Limited
(Incorporated with limited liability in South Africa under registration number
1986/004794/06)
Bond Issuer Code: ABMN
Rating downgrade of five South African banks by Moody`s Investors Service
Notice is hereby given that Moody`s Investors Service has today downgraded by
one notch the senior debt and deposit ratings of five South African banks,
including Absa Bank Limited. The downgrades reflect the impact of the country`s
increasingly constrained public finances and Moody`s view that authorities would
face challenging policy choices if multiple institutions were to need its
financial support
at the same time. The downgrades are part of Moody`s global assessment of the
systemic support levels incorporated in banks` deposit and debt ratings, which
addresses the growing difficulties governments face in extending systemic
support to their banking systems.
Moody`s stated that today`s rating action is not driven by a deterioration in
the standalone financial strength or the financial performance of these five
institutions. This concludes Moody`s review for downgrade of these banks,
initiated on 10 November 2011.
In addition, Moody`s has also downgraded by one notch the subordinated debt
instruments of the above-mentioned banks. These downgrades reflect the removal
of systemic support assumptions from the subordinated debt instruments of South
African banks, prompted by Moody`s expectation that authorities will likely make
greater use of their resolution tools to allow burden sharing with subordinated
bondholders.
Ratings affected by today`s action.
The Global Local Currency long-term deposit rating and the long-term national-
scale deposit rating have been downgraded to A2 and Aa2.za, from A1 and Aa1.za,
respectively and have been both left on review for possible downgrade.
With regards to the bank`s EMTN programme, the provisional foreign-currency
senior unsecured debt rating has been
downgraded to (P)A2 from (P)A1. Any issued foreign-currency senior unsecured
debt has been downgraded to A2 from A1.
The provisional foreign-currency subordinated and junior subordinated debt
ratings under its EMTN programme have also been downgraded to (P)Baa1 and
(P)Baa2, from (P)A2 and (P)Baa1 respectively. All ratings have been left on
review for possible downgrade.
The C- BFSR (stable outlook), the P-1 short-term local-currency deposit rating,
the A3 long-term foreign-currency deposit rating (negative outlook), the P-2
short-term foreign-currency deposit rating and the P-1.za national-scale short-
term deposit rating, all remain unaffected.
United Towers (Proprietary) Ltd (subsidiary and preference shares vehicle of
Absa Bank Limited)
The long-term national-scale issuer rating has been downgraded to A1.za from
Aa3.za, due to the downgrade of the parent bank`s Global Local Currency long-
term deposit rating that guarantees United Towers` preference share obligations.
The rating was also placed on review for possible downgrade.
The P-1.za short-term national-scale issuer rating remains unaffected.
29 February 2012
Debt sponsor
Absa Capital
(the investment banking division of Absa Bank Limited, affiliated with Barclays
Capital)
Date: 29/02/2012 16:32:01 Produced by the JSE SENS Department.
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