S&P downgrades Bicsa

S&P said it lowered the long-term global scale issuer credit rating on Banco Internacional de Costa Rica (Bicsa) to BB- from BB and affirmed its B short-term issuer credit rating.

The agency also said it removed the ratings from CreditWatch with negative implications, where they were placed in February.

The outlook is negative. The stand-alone credit profile remains at BB.

The downgrades follow the bank’s potential resilience to a hypothetical default of Costa Rica, S&P explained.

For an entity to be rated above the relevant sovereign foreign-currency rating, the entity should be able to pass a hypothetical sovereign foreign-currency default stress test, the agency said.

The bank has about 45% of its loan exposure in Costa Rica as of Dec. 31, 2015, S&P said.

The sovereign rating will continue to constrain the ratings on the bank, so the ratings will move in tandem with those on the sovereign, the agency said.

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