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Moody's upgrades Dexia Crediop

Moody's on April 28 upgraded to Baa3 from Ba3 the long-termdeposit and senior unsecured ratings of Dexia Crédit Local SA unit , with a stableoutlook.

The agency also upgraded the bank's short-term depositrating to Prime-3 from Not Prime, its stand-alone baseline credit assessment to"b2" from "caa1," and its long- and short-term counterpartyrisk assessments to Baa3(cr)/Prime-3(cr) from Ba3(cr)/Not Prime(cr). Inaddition, the agency affirmed the lender's adjusted baseline credit assessmentat "b2".

Moody's said the upgrades reflect its revised view thatDexia Crediop's ongoing resolution is intrinsically linked to the orderlyresolution of parent Dexia Crédit. The agency said that there is now very lowlikelihood that Dexia Crediop will be resolved separately from the rest of thegroup.

Moody's said it corrected an error in Dexia Crediop'sdeposit and senior unsecured ratings and its counterparty risk assessment,which were positioned at Ba3 and Ba3(cr)/Not Prime(cr), respectively. Theagency noted that the positioning failed to properly reflect the risk of lossaccording to the advanced loss given failure analysis that was previouslyapplied to Dexia Crediop on a stand-alone basis.