Moody's lowers Banco Bandes Uruguay

Moody's Investors Service said it downgraded Banco Bandes Uruguay SA's long-term global local- and foreign-currency deposit ratings to Caa2 from Caa1.

Moody's also said it downgraded the bank's long-term Uruguayan national scale local- and foreign-currency deposit ratings to Caa2.uy from Caa1.uy and its baseline credit assessment and adjusted baseline credit assessment to Caa2 from Caa1.

The long-term counterparty risk assessment was downgraded to Caa1(cr) from B3(cr).

The not-prime short-term global local- and foreign-currency deposit ratings and short-term credit assessment of not-prime(cr) also were affirmed.

The outlook was revised to stable from negative.

The downgrades reflect the bank's strong credit interlinkages with its owner Banco de Desarrollo Económico y Social de Venezuela, which is owned and controlled by the government of Venezuela, Moody's said.

The downgrades also consider the worsening financial situation and large external funding gap in Venezuela, the agency said.

In March, Moody's downgraded Venezuela's ratings to C from Caa3 due to the continuing erosion of the country's capacity to service its principal and interest obligations, coupled with limits on its ability to restructure its debt.

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