Fitch cuts European bank hybrid debt ratings
NEW YORK |
NEW YORK Aug 20 (Reuters) - Fitch Ratings cut its ratings on the subordinated debt of various banks on Thursday, citing an increased risk that regulators will force them to defer interest payments on the bonds.
Fitch downgraded hybrid securities of Lloyds Banking Group (LLOY.L) and the Royal Bank of Scotland Group (RBS.L), ING Group (ING.AS), ABN Amro, SNS Bank SR.AS, Fortis Bank Nederland and BPCE deeper into junk territory and said it may cut them further. To see the full list, click on [ID:nWNA1785]
Moody's Investors Service also cut its ratings on ING's subordinated debt into junk territory on Thursday, citing an increased risk that coupon payments on the bonds will be deferred.
European banks including KBC (KBC.BR) and Anglo Irish Bank ANGLLN.UL have said they will not pay interest on some bonds as regulators force bondholders to share the pain of bailed-out banks. For details, see [ID:nL6162518]
The downgrades reflect "increased risk of deferral of interest payments after the European Commission clarified its stance on bank hybrid capital, and in particular the application of the concept of 'burden-sharing,'" Fitch said in a statement.
Moody's said on Wednesday that it is broadening its review of hybrid bonds sold by European banks and insurers that have state aid packages pending approval before the European Commissions. (Reporting by Karen Brettell; Editing by Dan Grebler)
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