DBRS on June 6 downgraded the ratings of Banco Popular Español SA and placed them under review with negative implications.
The rating agency downgraded the Spanish bank's issuer rating and senior unsecured long-term debt and deposit rating to BB (low) from BBB (low), short-term debt and deposit rating to R-4 from R-2 (middle), long-term critical obligations rating by two notches to BBB (low) and short-term critical obligations rating to R-2 (middle) from R-1 (low).
The ratings actions follow the bank's lowering of intrinsic assessment to BB (low) from BBB (low) and reflect DBRS' increasing concerns with regard to the bank's ability to reinforce its weak capital through a rights issue or corporate acquisition following a deterioration of investor and customer confidence. It also reflects DBRS' concerns of the bank's credit fundamentals deteriorating.
DBRS noted that as the issuer rating and debt and deposit ratings are under review with negative implications, any upside pressure is unlikely in the short term.