Moody's placed Nykredit Realkredit and Nykredit Bank on review for possible downgrade on 14 April 2011. Moody's has today announced downgrades of Nykredit Realkredit A/S's and Nykredit Bank A/S's issuer ratings by one notch from A1 to A2. The downgrades also have implications for the ratings of hybrid capital, subordinated capital and junior covered bonds, cf the attached press releases from Moody's. Nykredit Realkredit A/S's and Nykredit Bank A/S's P-1 short-term ratings were affirmed.
Moody's press release does not address the possible implications for Nykredit's covered bond ratings. Moody's has also announced new overcollateralisation levels required in the capital centres to maintain the current covered bond ratings, cf Moody's press release on this subject. The new overcollateralisation levels do not take into account the changes to the capital centres that Nykredit announced on 21 June 2011. Discussions are ongoing between Nykredit and Moody's on the overcollateralisation levels needed in the light of the announced changes.
- The downgrade of Nykredit's ratings is unsatisfactory, but was expected given the downward pressure on ratings of financial institutions in general and in Denmark in particular, as well as the constraints on Nykredit's possibilities of raising administration margins, says Peter Engberg Jensen, Group Chief Executive of Nykredit.
- I have taken note that Moody's recognises Nykredit's latest steps to secure long-term financial stability, but await the tangible effects from these measures, says Peter Engberg Jensen.
Contacts:
Kim Duus, Group Managing Director, or Corporate Communications, tel +45 44 55 14 71.
Attachments
