Fitch puts Allgemeine Hypothekenbank on negative watch

Fitch Ratings said it placed Allgemeine Hypothekenbank Rheinboden AG's F3 short-term rating, 2 support rating, BBB- senior unsecured debt rating and BB+ subordinated debt rating on Rating Watch negative. The agency also assigned a BBB- issuer default rating, which was also put on negative watch.

In addition, the bank's individual rating was upgraded to D/E from E and remains on Rating Watch positive.

Fitch said the rating actions reflect the fact that the bank's restructuring is likely to weaken its position as a major issuer of Pfandbriefe in the international markets and consequently the sovereign support for it. The bank's owner Lone Star Funds is aiming to reposition the bank as a niche mortgage bank, focusing on German commercial real estate lending.

The upgrade of the bank's individual rating takes into account the on-going restructuring of the bank, including its recapitalization, and Fitch's view that the bank will be better positioned once Lone Star completes the restructuring.

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