This site uses cookies to provide you with a great user experience. By using BondbloX, you accept our use of cookies.
Bond Market News
French Banks Downgraded by Moody’s
December 18, 2024
Moody’s has downgraded several French banks’ ratings, following the downgrade of France’s sovereign rating from Aa2 to Aa3. The affected institutions include:
- BNP Paribas (BNPP), Credit Agricole (CASA), Credit Agricole Corporate and Investment Bank (CACIB), all Groupe Credit Agricole’s (GCA) French regional banks, Banque Federative du Credit Mutuel (BFCM), Credit Industriel et Commercial (CIC), and Credit Mutuel Arkea (CMA), with long-term ratings downgraded by a notch to A1 from Aa3 and outlooks changed to stable from negative. Their Counterparty Risk Assessments (CRAs) and Counterparty Risk Ratings (CRRs) were also downgraded.
- BPCE, Natixis S.A., Banque Palatine, all Groupe BPCE’s French local banks, and La Banque Postale (LBP) saw their CR Assessments and CRRs downgraded to A1(cr) and A1.
- SFIL‘s long-term ratings were downgraded from Aa2 to Aa3 with a stable outlook, and its CR Assessment and CRR were also downgraded.
- EPIC Bpifrance, CDC and Bpifrance’s backed senior unsecured debts were downgraded from Aa2 to Aa3 with a stable outlook.
- 3CIF and IXIS CIB had their backed senior unsecured debts downgraded to Aa3 from Aa2, with a stable outlook.
These actions are linked to the weakening of France’s public finances, exacerbated by political fragmentation and uncertainty regarding fiscal consolidation. While previously, systemic and strategic French banks received a one-notch uplift in their long-term ratings due to government support, this uplift was removed for several banks (BNPP, CASA, CACIB, GCA’s Regional Banks, BFCM, CIC, and CMA) due to the weakening creditworthiness of the French government. As a result, their ratings were downgraded to A1, but their stable outlook reflects the expected stability of their intrinsic creditworthiness. The government’s inability to push through significant fiscal reforms increases the likelihood of long-term fiscal challenges.
Bonds of these banks continued to trade stable. For instance BNP 8% Perp traded at 104.3, yielding 7.18%.
Go back to Latest bond Market News
Related Posts:
Deutsche Bank Upgraded to BBB+ by Fitch
September 24, 2021
Credit Suisse Downgraded by Fitch to BBB+
May 19, 2022
BondbloX Pte. Ltd. is regulated by the Monetary Authority of Singapore as a Recognised Market Operator ("RMO") and exempted from Section 49(1) of the Securities and Futures Act (Cap. 289) ("SFA") under Section 49(7) of the SFA.