Moody’s lowers People’s United, debt

Moody's Investors Service said it downgraded the long-term ratings of People's United Financial Inc. and its subsidiaries, including its lead bank, People's United Bank NA and affirmed its short-term ratings.

For People's United Bank, Moody's downgraded the long-term deposit rating to A2 from A1, the standalone and adjusted baseline credit assessment (BCA) to baa1 from a3, the issuer rating and subordinate debt rating to Baa2 from Baa1 and the long- and short-term term counterparty risk assessments to A3(cr) and Prime-2(cr) from A2(cr) and Prime-1(cr).

For People's United Financial and its subsidiaries, Moody's downgraded the senior unsecured debt, long-term issuer rating and subordinate debt rating to Baa2 from Baa1.

People's United Financial's short-term issuer rating of Prime-2 and People's United Bank's short-term bank deposit ratings of Prime-1 were affirmed.

The outlook is stable.

Moody’s said the downgrade reflects People's below-average profitability, weaker capital position and sizeable commercial real estate (CRE) concentration. The agency said that People's below-average capital is a function of its constrained profitability as the bank attempts to support its capital return metrics. Meanwhile, People's below average capital ratios underscore the challenge of its CRE concentration, according to the agency.

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