After Moody's published its new bank rating methodology on Monday, which is said to be the primary methodology for the investor service's bank ratings globally from now on, Moody's announced multiple rating actions. The rating actions affect 1,021 out of 1,934 rated banking entities, which include operating banks, holding companies, subsidiaries, special purpose issuance conduits, branches and other entities for which Moody's has assigned ratings to at least one debt class. Within this total group of entities, 856 are assigned baseline credit assessments (BCAs) of which 147 are affected.
Of the total 147 BCAs that have been placed under review, 84 are set for an upgrade, and 63 are set for a downgrade, while 451 senior unsecured debt and issuer ratings have been placed under review, 314 for an upgrade, 96 for a downgrade and 11 whose direction is uncertain. At the same time, Moody's has affirmed 124 long-term deposit ratings and 147 senior unsecured debt and issuer ratings.
"Our fundamental approach to bank ratings has not changed dramatically, but we have introduced a number of new tools to enhance our analysis, which has resulted in these rating reviews," said Greg Bauer, Moody's co-head of Global Banking. "These reviews are prompted by our new methodology, which we are confident will enable us to appropriately reflect the rapidly evolving global banking environment as it continues to develop."
Furthermore, a statement released by the agency stressed: "The reviews follow yesterday's publication of Moody's updated bank rating methodology - which incorporates several new elements designed to help accurately predict bank failures and determine how each creditor class is likely to be treated when a bank fails and enters resolution - reflecting insights gained from the crisis and the fundamental shift in the banking industry and its regulation."
