Moody's on Dec. 12 upgraded the long-term issuer and senior unsecured debt ratings of Barclays Plc to Baa2 from Baa3 and the long-term deposit and senior unsecured debt ratings of the group's main operating company, Barclays Bank Plc, to A1 from A2.
The ratings outlook on both entities remains negative. The ratings action does not affect the "baa2" stand-alone baseline credit assessment, A1(cr)/Prime-1(cr) counterparty risk assessments and other long- and short-term ratings of Barclays Bank.
Moody's said the upgrades were prompted by its assessment that Barclays' senior unsecured and Barclays Bank's junior depositors and senior unsecured creditors face a lower loss given failure due to Barclays' issuance of loss-absorbing capital thus far, with further issuance expected in the near term.
The agency noted that Barclays Bank's baseline credit assessment continues to be challenged by negative pressures such as the uncertainty of the U.K.'s operating environment following Brexit, as well as the Barclays group's current subpar profitability.