Source: Citi
L’avalanche de dégradations de plusieurs banques internationales par Moody’s (lien vers l’annonce officielle), hier, provoque ce matin quelques commentaires de brokers. Voici celui de Citi.
« Moody’s has announced the results of its review of the credit ratings of financial groups with global capital markets operations, initiated in February. Among others, the latest announcement reviews the credit ratings of Barclays, BNP Paribas, Credit Agricole, Credit Suisse, Deutsche Bank, HSBC, RBS, Societe Generale and UBS.
HSBC and UBS Fare Better – From the major European wholesale banks, Moody’s downgrades were consistent with its maximum notch downgrade guidance with the notable exceptions of HSBC and UBS. HSBC ‘only’ experienced a one-notch downgrade to Aa3 (guidance of up to two-notch downgrade) while UBS ‘only’ saw a two-notch downgrade to A2 (guidance of up to three-notch downgrade). The latter was consistent with our expectation in Why Credit Ratings Matter (30 April 2012) when we stated that UBS would likely avoid a three-notch downgrade. Although CS experienced a three-notch downgrade its new rating is A1, or at the higher end of the peer group (Figure 1).
Ratings Have ‘Wings’ – As we previously noted in Why Credit Ratings Matter, the dispersion of long-term credit ratings has increased. Markets tend to discriminate more between issuers at lower ratings – in terms of funding costs – particularly during times of stress. The new ratings landscape could provide a competitive edge for higher-rated firms, notably the “first group of firms” as defined by Moody’s – HSBC, JPMorgan and RBC. By contrast, RBS has the joint lowest rating of the global capital market banks.
Negative Outlook – Credit Agricole now has a negative standalone outlook, mainly reflecting the group’s Greek exposures. Separately, the outlook on the senior debt ratings of the UK banks is negative, reflecting Moody’s view that government support for large UK banks may be lowered in the medium-term as part of ‘burden sharing’ with senior debtholders in the resolution of large, complex banks.
Short-Term Ratings, Near-Term Impact – At the bank or operating company level, RBS was downgraded from P-1 to P-2. We estimate that the short-term rating downgrade may place c£30bn of outstanding funding at risk (based on CP & CD outstanding, plus some corporate deposits), albeit this is well covered by the £153bn liquidity buffer. UBS maintained its P-1 short-term rating despite the former ‘rating under review’ stance.
Counterparty Confidence Counts – Although counterparties do not rely solely on external ratings and ‘only’ c30% of Fixed Income sales & trading is ‘non-cleared’ (more rating sensitive, see Sizing Up “The Elephant in the Room” – Regulatory Paradigm Shift and the Impact on Fixed Income Trading (30 May 2012)) during times of crisis heightened counterparty risk increases the ‘tail-risk’ – especially of lower-rated firms. Our Most Preferred banks comprise of Barclays, HSBC and Societe Generale while our Least Preferred list included CASA among the major global capital market banks (other Least Preferred banks are Banco Popular and Intesa Sanpaolo). »
