Moody's acts on Greek bank Piraeus following hive-down

Moody's on Jan. 4 took action on Piraeus Bank SA after the planned hive-down of the Greek bank received shareholder approval.

The agency assigned the new legal entity, Piraeus Bank SA, long- and short-term bank deposit ratings of Caa2/NP, with a stable outlook on the long-term ratings. It also assigned the company baseline and adjusted baseline credit assessments of "caa2," long- and short-term counterparty risk ratings of B3/NP and long- and short-term counterparty risk assessments of B2(cr)/NP(cr).

As part of the changes, most of the activities, assets and liabilities of the former Piraeus Bank were transferred to the new banking entity. Following the completion of the demerger, the legacy entity, to be renamed Piraeus Financial Holdings SA, became the holding company and ceases to be a credit institution.

As such, Moody's withdrew the former Piraeus Bank entity's long- and short-term bank deposit ratings of Caa2/NP, with the long-term rating carrying a stable outlook at the time of withdrawal. Also withdrawn were the former entity's baseline and adjusted baseline credit assessments of "caa2," long- and short-term counterparty risk ratings of B3/NP and long- and short-term counterparty risk assessments of B2(cr)/NP(cr).

The demerged entity was then assigned long- and short-term issuer ratings of Caa3/NP, with a stable outlook on the long-term rating.

In assigning the ratings to the new banking entity, Moody's said it factored in the implementation of the bank's corporate restructuring, as well as the significant downside asset risks from the impact of the COVID-19 pandemic on the national economy and the remaining soured loans in the bank's balance sheet.