Moody's cuts some Banco Industrial notes to B1

Moody's Investors Service said it lowered the foreign-currency subordinated debt rating on $35 million of non-cumulative step-up tier 1 capital notes issued by Banco Industrial SA to B1 from Ba3, in line with its revised guidelines for rating bank hybrids and subordinated debt.

The action concludes the review for downgrade begun on Nov. 18, 2009.

The outlook is stable.

Moody's said its revised guidelines largely remove previous assumptions of systemic support and generally widen the notching on a hybrid's rating based on the instrument's particular features.

The rating reflects the 60-year maturity, non-cumulative coupon skip mechanism and deep subordination in liquidation, according to the agency.

Coupon skip features include optional and mandatory cancellation of interest, the agency said.

The rating also reflects the strong fundamentals of the bank, including a high level of common equity, the agency said, along with the bank's systemic importance in Guatemala's developing market.

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