Fitch lowers Arab Banking Corp rating
Manama, March 9, 2011
Fitch Ratings has downgraded Bahrain-based Arab Banking Corporation's (ABC) long-term issuer default rating (IDR) to BB from BBB-.
The outlook is stable. The agency has also downgraded the bank's senior unsecured debt to BB from BBB-, subordinated debt to BB- from BB+, short-term foreign currency IDR to B from F3 and support rating to 3 from 2.
All ratings have been removed from rating watch negative (RWN). The individual rating of D has been affirmed.
The rating action follows the downgrade of Libya's long-term IDR to BB, RWN from BBB, RWN as the Central Bank of Libya is ABC's majority shareholder.
The extent of the downgrade is limited by Fitch's view that there is a moderate probability of support from the Kuwaiti Investment Authority which has a 29.7 per cent stake in ABC and Kuwait is rated AA stable.
While Fitch believes that the Central Bank of Libya continues to be committed to ABC, there would be practical difficulties considering the conditions in Libya.
The affirmation of the individual rating reflects ABC's improving performance and strengthening capitalisation in 2010, following its $1.1 billion rights issue in March 2010.-TradeArabia News Service
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