Fitch lowers Fortis hybrids to BB-

Fitch Ratings said it downgraded Fortis Bank's hybrid capital instruments to BB- from BBB- and placed them on Rating Watch negative.

The agency affirmed the remaining ratings of Fortis Bank and BGL SA, including their A+ long-term issuer default and senior unsecured debt ratings, A subordinated debt ratings, F1+ short-term issuer default ratings, 1 support ratings and A+ support rating floors.

These ratings were removed from Rating Watch positive, and the outlook is stable.

The removal of the Rating Watch positive reflects Fitch's view that BNP Paribas' plans to acquire controlling stakes in Fortis Bank and BGL are now unlikely to go ahead, following the decisions taken this week during Fortis' shareholders' meetings. As a consequence, Fortis Bank and BGL SA will continue to be state-controlled in the absence of an alternative solution, the agency predicted.

The downgrade of the hybrid capital instruments and Rating Watch negative placement reflect Fitch's view that the risk of coupon deferral has materially increased because the bank will now remain government-controlled and earnings are likely to remain under pressure in the current operating environment.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.