Moody's lowers Dexia Bank

Moody's Investors Service said it downgraded by one notch to Baa1 with a stable outlook, from A3 on review with direction uncertain, the long-term senior debt and deposit ratings of Dexia Bank Belgium.

The agency said the short-term rating was also downgraded to Prime-2 from Prime-1.

Moody's said the downgrade of the long-term senior debt and deposit ratings to Baa1 directly follows Moody's downgrade of the bank's standalone bank financial strength rating to D, mapping to ba3 on the long-term scale, with a positive outlook.

The agency said the downgrades were triggered by Moody's view that despite its progressive disentangling from the Dexia Group, Dexia Bank is likely to need more time than initially expected to stabilize its financial profile, including its liquidity, its profitability and its risk concentrations.

The long-term ratings continue to benefit from a very high degree of systemic support, resulting in five notches of uplift from DBB's standalone credit strength, the agency said.

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