Moody’s rates Credit Agricole note programs Baa2

Moody's Investors Service said it assigned provisional Baa2 ratings to the long-term senior non-preferred note programs of Credit Agricole SA.

This action follows the enactment of the French law "Sapin II" (published on Dec.), whose Article 151 creates a new category of senior debt.

The senior non-preferred notes, referred to as "junior senior" unsecured notes by Moody's, will be issued under Credit Agricole’s €75 billion euro medium-term note program and $20 billion global medium-term note program.

The notes will be explicitly designated as senior non-preferred in the documentation. As such, they will rank junior to other senior obligations, including senior unsecured debt, and senior to subordinated debt.

They will have a minimum maturity at issuance of one year.

Moody’s said the provisional Baa2 ratings reflect: (a) Credit Agricole’s adjusted baseline credit assessment (BCA) of baa1; (b) Moody's Advanced Loss Given Failure (LGF) analysis, which indicates likely high loss severity for these instruments in the event of the bank's failure, leading to a position one notch below the bank's adjusted BCA; and (c) Moody's assumption of a low probability of government support for this new instrument, resulting in no uplift.

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