Moody's on Oct. 13 assigned A3/Prime-2 long- and short-term issuer ratings to Socram Banque SA, and upgraded its adjusted baseline credit assessment to "baa1" from "baa2."
At the same time, the rating agency affirmed the French lender's A3/Prime-2 long- and short-term deposit ratings, A2(cr)/Prime-1(cr) long- and short-term counterparty risk assessments and "baa3" baseline credit assessment.
Moody's said the ratings actions were driven by an expected change in Socram Banque's liability structure over the coming months as a result of its issuance of around €480 million of asset-backed securities, which the agency believes is likely to increase the loss given failure for the bank's senior unsecured creditors and long-term depositors.
The outlook on the long-term ratings is stable, reflecting Moody's view that the bank's liability structure will remain stable over the outlook horizon, and that its intrinsic creditworthiness and support from its parent companies are sustainable.
Meanwhile, Moody's said the upgrade of Socram Banque's adjusted BCA resulted from the agency's advanced loss given failure analysis of the bank based on its expected liability structure.