Moody’s lowers Rabobank view to negative

Moody's Investors Service said it affirmed Rabobank's long-term deposit and senior unsecured debt ratings at Aa2, along with its baseline credit assessment and adjusted baseline credit assessment at A2.

The agency also said it revised the outlook on long-term deposit and senior unsecured debt ratings to negative from stable.

The agency also said it upgraded Rabobank's €1.25 billion senior contingent notes due in 2020 to A3(hyb) from Baa2(hyb).

At its current level, the bank's baseline assessment largely incorporates expected improvements resulting from the bank's ongoing restructuring program, Moody’s explained.

The negative outlook reflects the execution risks inherent to the transformation, the agency added.

The ratings are driven by the strong financial fundamentals of the bank, in particular its solid asset quality and high level of capitalization, Moody’s said.

The ratings also consider the additional improvements expected from a broad ongoing restructuring, which resulted in a far-reaching overhaul of the bank's governance structure and anticipates significant staff reductions and other cost-cutting and revenue generation initiatives, the agency said.

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