The credit ratings of the four major banks were left unchanged in S&P’s sweeping downgrades of 23 financial institutions yesterday, but their hybrid securities were not so fortunate.
All four of the major banks saw their hybrids downgraded, in a move S&P said reflected its view that government support would be “unlikely to be extended to [major bank] hybrid and subordinated debt instruments”.
S&P also lowered the ‘standalone credit profiles’ of the major banks – although this is offset by the expectation of “likely timely support from the Australian government, if needed”.
ANZ was the only bank to issue a statement on the S&P decision, noting that its hybrid debt would be downgraded from BBB- to BB+.
ANZ’s Basel 3 subordinated debt has been downgraded from BBB+ to BBB; its Basel 2 subordinated debt downgraded from A- to BBB+; and its senior debt downgraded from ‘stable’ to AA- (negative).
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