S&P downgrades Alpha Bank, debt to D

Standard & Poor's said it lowered its long-term counterparty credit rating on Alpha Bank AE to D from SD.

The agency also lowered its issue ratings on the bank's senior unsecured debt to D from CCC- and subordinated debt ratings to D from C.

S&P said the downgrades follow Alpha's announcement on Oct. 28 of the launch of a tender offer to exchange securities from holders of its additional Tier 1 (AT1) debt, Tier 2 debt and senior debt instruments with either cash or equity.

This constitutes a "distressed exchange" under the agency’s criteria because it implies that investors will receive less value than the promise of the original securities. This is because the issuer offers to exchange the securities for an instrument of lower ranking in the issuer's capital structure and/or pay a significant discount in case of a cash exchange.

Additionally, S&P said it thinks the offer is not purely opportunistic, according to our criteria, given the financial position of the bank.

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