News Column

Moody's upgrades Portuguese banks' government-guaranteed debt to Ba2 from Ba3 and places ratings on review for further upgrade

May 19, 2014



Moody's Investors Service has today upgraded to

Ba2 from Ba3 the government-guaranteed debt ratings of 3 Portuguese

banks: Caixa Geral de Depositos, S.A. (CGD), Banco Espirito Santo, S.A.

(BES), and BANIF-Banco Internacional do Funchal, S.A.(Banif). At the

same time, the ratings of the government-guaranteed debt of these banks

has been placed on review for further upgrade.

These rating actions follow the upgrade of the government bond ratings of

Portugal to Ba2 and review for further upgrade, implemented on 9 May 2014

(for further details please see "Moody's upgrades Portugal's government

bond rating to Ba2 and places rating on review for further upgrade").

Today's rating actions only affect the ratings of those instruments that

are based on the unconditional and irrevocable guarantee by the

Portuguese government. Moody's will separately assess the potential

impact of the upgrade and review for further upgrade of Portugal's

government bond ratings on the debt and deposit ratings of Portuguese

banks.

RATINGS RATIONALE

RATIONALE FOR GOVERNMENT-GUARANTEED DEBT

Moody's rates Portuguese government-guaranteed debt at the sovereign rating level. The rating on the government-backed debt of the 3 affected

banks has therefore been aligned with Portugal's Ba2 government bond

rating on review for further upgrade.


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Source: EMBIN (Emerging Markets Business Information News)


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