(The following statement was released by the rating agency)
July 25 - Standard & Poor’s Ratings Services today corrected its rating on the subordinated debt of Norway-based Eksportfinans ASA (BB+/Negative/B) by lowering it to ‘BB-’ from ‘BB’.
In a rating action on Eksportfinans on Feb. 15, 2012, we incorrectly lowered the subordinated debt rating to ‘BB’, one notch below the issuer credit rating (ICR). According to our revised bank hybrid capital methodology (“Bank Hybrid Capital Methodology And Assumptions,” published Nov. 1, 2011, on RatingsDirect on the Global Credit Portal), the rating on Eksportfinans’ subordinated debt should have been lowered to ‘BB-', two notches below the ICR, when the ICR on Eksportfinans was lowered to speculative grade level (see “Research Update: Norway’s Eksportfinans Downgraded To ‘BB+/B’ On Lower Likelihood Of Government Support; Outlook Negative”, published Feb. 15, 2012).
The European Commission has proposed a framework for a bank recovery and resolution regime, which in our view reduces to negligible the likelihood that subordinated debt will benefit from government support. Accordingly, as announced in (“Subordinated Debt Of Several European Banks Downgraded On EC Draft Resolution Framework; Other Debt Ratings Unaffected,” published July 24, 2012), we no longer expect subordinated debt issued by Norwegian banks to receive any form of government support given Norway’s participation in the European Economic Area. As a result, the ratings on Eksportfinans’ subordinated debt are now two notches below the bank’s ‘bb+’ stand-alone credit profile rather than the ‘bb+’ ICR.
-- Applying The Bank Hybrid Capital Criteria To Specific Instruments, Dec. 20, 2011
-- Sharing The Burden Of Bank Support: Countries Where Subordinated Debt Is Becoming Riskier, Nov. 29, 2011
-- Banks: Rating Methodology and Assumptions, Nov. 9, 2011
-- Bank Hybrid Capital Methodology and Assumptions, Nov. 1, 2011
-- Bank Resolution Regimes: Potential Rating Implications As Sovereign Support Frameworks Evolve, March 16, 2011