Moody's on May 27 downgraded Commerzbank AG's junior senior unsecured debt rating to Baa2 from Baa1.

The downgrade reflects Moody's computation of a higher loss given failure under its Advanced Loss Given Failure analysis for junior senior unsecured instruments, as a result of a decline in the volume of loss-absorbing instruments for the rating class. Additionally, the downgrade positions the German bank's junior senior unsecured debt rating in line with its "baa2" adjusted baseline credit assessment.

Moreover, the agency also downgraded the junior senior unsecured debt ratings of Dresdner Bank AG, Hypothekenbank Frankfurt AG and RHEINHYP Rheinische Hypothekenbank — whose debts were assumed by Commerzbank — to Baa2 from Baa1.