Moody’s changes People’s United to negative

Moody's Investors Service said it affirmed the ratings of People's United Financial Inc. and its bank subsidiary, People's United Bank NA, and changed the outlook to negative from stable.

People's United Financial is rated Baa1 for senior unsecured debt and its long- and short-term issuer ratings are Baa1/Prime-2. It has shelf ratings of provisional Baa1 for senior unsecured and subordinate debt, provisional Baa2 for preferred stock and provisional Baa3 for non-cumulative preferred stock.

People's United Bank has long- and short-term bank deposit ratings of A1/Prime-1 and a standalone and adjusted baseline credit assessment (BCA) of a3. Its issuer rating and subordinate debt rating is Baa1 and its counterparty risk (CR) assessment is A2 (cr)/Prime-1 (cr).

Moody's said the outlook change is in response to credit concerns related to People's commercial real estate (CRE) portfolio. The concerns center on the portfolio's growth, which accentuates its CRE credit concentration. The sizable growth of the CRE portfolio tests controls and challenges the bank's ability to maintain prudent underwriting in a competitive market, each of which weighs on the firm's credit profile.

Moody's assessment of People's asset risk, supported by its historically strong asset quality performance is the central pillar to its current rating.

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