Friday, 27 February 2009

More Downgrades on Hybrid Capital Securities: This Time the Turn Is for Dresdner

Standard and Poor's lowered the ratings on Dresdner Bank AG's €1 billion hybrid Tier 1 capital instruments issued through a special purpose vehicle, and on the €750 million upper Tier 2 capital instruments issued through another SPV, both to CC from BB+. Dresdner Bank's hybrid Tier 1 capital instruments issued through Dresdner Funding Trust I, II, III, and IV were downgraded too. Various other junior subordinated Tier 1 instruments related to Commerzbank AG and its subsidiary Eurohypo AG were cut to BB' from BB+. Dresdner was bought by Commezbank last year -- the German bank is downsizing the operations of its acquisition, especially in Latin America (there's an interesting article on LatinFinance's daily brief today about Dresdner Kleinwort's Latin businesses.)

The issue ratings will remain on CreditWatch, meaning they can be downgraded again within the next three months and where they were placed with negative implications on Jan. 12.

No comments:

Post a Comment