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Moody's reviews Banque PSA
Moody's Investors Service said it placed Banque PSA Finance's D+ standalone bank financial strength rating, Baa3 long-term debt rating and P-3 short-term debt rating under review for downgrade. Also on under review is the Baa3 backed long-term debt ratings of subsidiary Peugeot Finance International NV.
The review follows the review for downgrade of parent company PSA Peugeot Citroen's long-term ratings. The agency said it considers Banque PSA's creditworthiness to be inherently linked to that of PSA Peugeot Citroen given their intricate strategic, commercial and financial ties.
The ratings of Banque PSA, which offers auto loans, are constrained by its lack of business diversification, large exposures to car dealers, reliance on confidence-sensitive wholesale funding and by inherent credit linkages with its lower-rated industrial parent, Moody's said.
However, the agency said it takes into consideration certain mitigating factors including good capitalization levels, sound profitability and a greater degree of asset and liability matching than those of traditional retail and commercial banks.
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