Moody's on March 27 downgraded Rabobank's long-term senior unsecured debt and deposit ratings to Aa3 from Aa2 and revised their outlooks to stable from negative.
The agency also downgraded the Dutch lender's baseline and adjusted baseline credit assessments to "a3" from "a2" and its long-term counterparty risk assessment to Aa2(cr) from Aa1(cr). Concurrently, Moody's affirmed Rabobank's P-1(cr) short-term counterparty risk assessment and its P-1 short-term bank deposit ratings.
The downgrade of the baseline credit assessment mainly reflects the challenges that Rabobank is facing in order to lower its operating expenses and ultimately improve its profitability. The Aa3 long-term senior unsecured debt and deposit ratings reflect the downgrade of Rabobank's baseline and adjusted baseline credit assessments.
The stable outlook reflects Moody's expectation that there will be no significant change in Rabobank's creditworthiness over the next two to three years.
The agency also downgraded Friesland Bank NV's long-term bank deposit ratings and Rabobank Australia Ltd.'s backed long-term bank deposit ratings to Aa3 from Aa2, and revised the outlook on the ratings to stable from negative. Friesland Bank's short-term bank deposit ratings and Rabobank Australia's backed short-term bank deposit ratings were affirmed at P-1.