Ratings roundup: Santander unit, First Aval upgraded, BBVA subsidiary affirmed

Wednesday, June 29, 2011

Moody's has upgraded the deposit and debt ratings of Banco Santander Puerto Rico, the banking unit of Puerto Rico's Santander BanCorp (NYSE: SBP), to A2/Prime-1 from A3/Prime-2.

The upgrade was driven by the ratings agency's view that within a US banking family, affiliates' deposit ratings should be equalized because of regulatory powers afforded by the cross-indemnification provisions of the Federal Deposit Insurance Act (FDIA).

This is relevant for the bank because its ultimate parent, Spain's Santander (NYSE: STD), also owns Sovereign Bank through a separate US holding company, Moody's said in a ratings report.

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Moody's also downgraded the bank's standalone financial strength rating to C- from C, due to Puerto Rico's very weak operating environment and the pressure that such an environment continues to exert on the bank's credit profile.

To read the full report, in English, go to this link


Chilean ratings agency Humphreys has upgraded local reciprocal guarantee provider (SGR) First Aval's solvency rating to A+ from BBB-.

The upgrade is based on an evaluation of the guarantee fund that acts as "reinsurer" for the company's certificates, as well as First Aval's commitment to guarantee 100% of all current and future certificates, the agency said in a report.

Humphreys also considered the support provided by the company's parent, local factoring and leasing firm First Factors, which provides financial services to SMEs, particularly in the factoring and leasing segments.

To read the full report, in Spanish, go to this link


S&P has affirmed its B+/B counterparty credit ratings on the Paraguayan unit of Spain's BBVA (NYSE: BBVA), as well as the bank's positive ratings outlook.

The ratings reflect BBVA Paraguay's good market position, solid financial indicators and explicit support from its parent.

"The uncertainty intrinsic to Paraguay's financial system, the country's high sovereign risk and the bank's portfolio concentration and relatively weak operating risk management constrain our ratings on BBVA Paraguay," S&P credit analyst Delfina Cavanagh wrote in a report.

BBVA Paraguay is the second largest bank in the country. It offers an array of products through its 22 branches, with a high concentration in corporate loans, but it is focusing increasingly on retail banking.

To read the full report, go to this link