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Moody's acts on 6 Portuguese banks

Moody's on Oct. 16 took actions on six Portuguese banks, following an upgrade to the country's government bond rating to Baa3 from Ba1 with a stable outlook.

The agency upgraded Caixa Geral de Depósitos SA's long-term deposit and senior unsecured debt ratings to Ba1 from Ba3, with a stable outlook; and baseline credit assessment and adjusted baseline credit assessment to "ba2" from "b1." The upgrades to the baseline credit assessments consider the bank's strengthened credit profile, while the upgrades of deposit and debt ratings consider the baseline credit assessments and assumptions of unchanged moderate government support for the bank.

At the same time, Moody's upgraded Millennium BCP's long-term deposit ratings to Ba3 from B1, with a positive outlook; senior unsecured program ratings to (P)Ba3 from (P)B1; and baseline credit assessment and adjusted baseline credit assessment to "b1" from "b2." The upgrades consider the bank's improving credit fundamentals, improving though still modest domestic bottom-line profitability, and the agency's assessment of unchanged moderate government support for the bank.

Banco Santander SA unit Banco Santander Totta SA's long-term deposit ratings were upgraded to Baa2 from Baa3 and long-term senior unsecured debt ratings to Baa3 from Ba1, with stable outlooks; baseline credit assessment to "ba2" from "ba3"; and adjusted baseline credit assessment to "baa3" from "ba1." The assessments take into account a high probability of affiliate support from the parent and also the weakening of some of the bank's key metrics after the acquisition of Banco Popular Español SA.

The agency upgraded Banco BPI SA's long-term deposit ratings to Baa1 from Baa3 and changed the outlook to stable from positive. Moody's also upgraded the CaixaBank SA unit's senior unsecured program ratings to (P)Baa2 from (P)Ba1, baseline credit assessment to "ba1" from "ba3," and adjusted baseline credit assessment to "baa3" from "ba2." The ratings actions are driven by factors such as a high likelihood of affiliate support from CaixaBank and the bank's strengthened credit profile.

Also, Montepio Geral – Associação Mutualista unit Caixa Económica Montepio Geral caixa económica bancária SA's long-term deposit ratings were affirmed at B3, and the outlook revised to positive from developing; senior unsecured program ratings affirmed at (P)B3; and baseline credit assessment and adjusted baseline credit assessment at "caa1."

Additionally, the agency placed on review for upgrade Novo Banco SA's Caa1 long-term deposit ratings and Caa2 long-term senior unsecured debt ratings, with the outlook on these ratings both changed to rating under review, from developing and positive, respectively. At the same time, the bank's "caa2" baseline credit assessment and adjusted baseline credit assessment were also placed on review for upgrade. The ratings actions reflect the potential benefit to the bank's weak credit fundamentals in the case of Novo Banco delivering on the key targets of its restructuring plan and other factors.