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S&P, Moody's act on AIB, new holding company

S&P Global Ratings on March 12 assigned Ireland-based AIB Group Plc BB+/B long- and short-term issuer credit ratings, with a positive outlook.

AIB Group is a newly established nonoperating holding company of Allied Irish Banks Plc, which recently completed a corporate overhaul.

S&P said the ratings reflect its view of Allied Irish Banks' intrinsic creditworthiness and are limited by the structural subordination of AIB Group's creditors. The positive outlook indicates that S&P could raise its assessment of the holding company's unsupported group credit profile by one notch to "bbb," and thus upgrade the ratings, during the next two years if the agency improves its view of risk in the Irish banking industry.

Meanwhile, Moody's affirmed Allied Irish Banks' Baa1/P-2 long- and short-term bank deposit ratings, Baa2 senior unsecured debt rating, "ba1" baseline and adjusted baseline credit assessments and A3(cr)/P-2(cr) long- and short-term counterparty risk assessments, and changed the outlook on the senior unsecured debt and long-term bank deposit ratings to positive from stable.

The outlook reflects ongoing improvement in asset quality, which could prompt an increase of the bank's baseline credit assessment, and the likelihood that the loss-given-failure for deposits and senior debt will be reduced by the protection received from AIB Group debt securities.

Moody's also affirmed Allied Irish Banks unit EBS DAC's Baa1/P-2 long- and short-term bank deposit ratings, "ba1" baseline and adjusted baseline credit assessments and A3(cr)/P-2(cr) long- and short-term counterparty risk assessments, and changed the outlook on the long-term bank deposit rating to positive from stable.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.