S&P, which said today it was considering downgrading T&T’s sovereign credit rating, is also scrutinising the ratings of both First Citizens Bank and Republic Bank due to the fallout from the CL Financial bailout.
Here are the statements, any emphasis/explanations mine:
S&P: First Citizens Bank Ltd. ‘BBB+/A-2’ Rating Put On CreditWatch Negative
[“CreditWatch Negative” means that a downgrade is likely within the next three months, pending further information/review]
[A triple-B rating is borderline investment grade; the institution is considered ‘satisfactory’]
MEXICO CITY Feb. 3, 2009–Standard & Poor’s Ratings Services said today that it placed its ‘BBB+/A-2’ counterparty credit rating on First Citizens Bank Ltd. on CreditWatch with negative implications.
Standard & Poor’s also said that it placed its ‘BBB+’ ratings on the $100 million bonds from First Citizens and First Citizens (St. Lucia) Ltd. on Credit Watch negative.
The CreditWatch placement follows Trinidad and Tobago’s announcement on Jan. 30, 2009, that it will assume control of or provide support to several key subsidiaries of CL Financial Group (CLFG), a large Trinidadian financial conglomerate. According to the central bank, CLFG’s financial condition has deteriorated because of related-party transactions, high-risk investments, and high leveraging of the group’s assets. The central bank has announced that it will take control of CLFG’s flagship bank, Clico Investment Bank (CIB), transfer its assets and deposits liabilities to First Citizens Bank (wholly owned by the government), and revoke CIB’s banking license. The government has announced that CLFG will divest assets, including its shares in Republic Bank Ltd. (a 55% share) and Methanol Holdings Trinidad Ltd., to First Citizens Bank and the government to make up the statutory fund shortfall, with the government backstopping any deficiency.
“We expect to resolve the CreditWatch status of the ratings when there is further clarification of First Citizens Bank participation in the bail out process and the impact that this will have on the bank’s overall creditworthiness,” said Standard & Poor’s credit analyst Angelica Bala.
S&P: Republic Bank Ltd. ‘BBB/A-2’ Rating Put On CreditWatch Developing
MEXICO CITY Feb. 3, 2009–Standard & Poor’s Ratings Services said today that it placed its ‘BBB/A-2’ counterparty credit rating on Republic Bank Ltd. on CreditWatch with developing implications.
The CreditWatch placement follows Trinidad and Tobago’s announcement on Jan. 30, 2009, that it will assume control of or provide support to several key subsidiaries of the CL Financial Group (CLFG), a large Trinidadian financial conglomerate that owns 55% of Republic Bank Shares. The government has announced that CLFG will divest assets, including its 55% share in Republic Bank Ltd., to First Citizens Bank and the government to make up the statutory fund shortfall, with the government backstopping any deficiency.
“We expect to resolve the CreditWatch status of the ratings when there is further information on how the transaction is going to be done and the implications to Republic Bank, currently the largest bank in the country,” noted Standard & Poor’s credit analyst Angelica Bala.
