13th Jul 2021 22:00
(Alliance News) - Moody's Investors Service on Tuesday upgraded the long-term senior ratings of Lloyds Banking Group PLC and Close Brothers Group PLC as the agency updated its methodology.
The rating agency said the actions were driven by revisions to its "Advanced Loss Given Failure" framework, which is applied to banks operating in jurisdictions with Operational Resolution Regimes, following the publication of its updated Banks Methodology.
Moody's upgraded Lloyds's long-term senior unsecured debt ratings to A2 from A3, the long-term subordinate debt ratings to A3 from Baa1, the backed junior subordinate ratings to Baa1 from Baa2 and the other short term ratings to (P)P-1 from (P)P-2.
The rating agency also affirmed the a3 notional BCA, the adjusted BCA and all other ratings of Lloyds.
"The ratings upgrade reflects Moody's revised Advanced Loss Given Failure framework. Moody's now expects the holding company's senior unsecured bondholders to face low loss-given failure (from moderate) and the subordinate and junior subordinate bondholders to face moderate loss-given-failure (from high). The agency applies an additional notching for junior subordinated instruments to incorporate coupon features," Moody's said.
In addition, Moody's upgraded Close Brothers Group's issuer rating to A2/P-1 from A3/P-2 and the long term senior unsecured debt rating to A2 from A3.
Moody's also said the affirmation of Close Brothers's Baseline Credit Assessment reflects the bank's solid track record over economic cycles, strong capital and leverage and historically high profitability.
"The holding company's senior unsecured debt rating upgrade reflects the affirmation of Close Brothers Ltd's a2 BCA, Moody's revised Advanced Loss Given Failure framework and low probability of government support, which does not result in any uplift. Moody's now expects the holding company's senior bondholders to face moderate loss-given-failure (from high)," Moody's said.
Meanwhile, Moody's upgraded Barclays PLC's subordinate debt ratings to Baa2 from Baa3 and subordinate MTN program and subordinate shelf ratings to (P)Baa2 from (P)Baa3.
"The ratings upgrade reflects Moody's revised Advanced Loss Given Failure framework. Moody's now expects the bank's subordinate and junior subordinate bondholders to face moderate loss-given-failure (from high), in line with the holding company's senior unsecured bondholders. The agency applies an additional notching for junior subordinated instruments to incorporate coupon features," Moody's explained.
NatWest Group PLC's senior unsecured debt rating has also been upgraded to Baa1 from Baa2, while the outlook remains positive.
By Arvind Bhunjun; [email protected]
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