Moody’s upgrades BPI rating to “Baa3” level

  • ECO News
  • 11 March 2020

The financial rating agency announced Wednesday the upward revision of the bank's rating led by Pablo Forero.

Moody’s announced this Wednesday the upward revision, based on the bank’s capital reinforcement, which moves to the “Baa3” level with a “stable” outlook. This is the first level of quality investment, and the action represents the end of a nine month period in which the bank was seen as a speculative investment.

The rating agency upgraded both BPI’s rating and the bank’s ordinary long-term senior debt. “The rating action taken today [Wednesday] reflects the 450 million euro non-preferential senior debt issue, which took place on March 6th, 2020 and was fully underwritten by the parent company CaixaBank,” explains the Moody’s report.

The issue aimed at strengthening the liabilities eligible to meet the future MREL (Minimum Capital Requirement and Eligible Credit) requirement, which obliges systemically important European banks to provide an additional financial cushion to deal with the difficulties. Moody’s added that this issue “increases the volume of uninsured senior subordinated debt that absorbs losses and therefore decreases loss levels for senior creditors in the event of bankruptcy.”

BPI is now rated with the ‘investment grade’ for long-term by the three international agencies: Fitch Ratings, Moody’s and S&P Global Ratings.