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Moody's assigns counterparty risk ratings to 6 Portuguese banking groups

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Moody's assigns counterparty risk ratings to 6 Portuguese banking groups

Moody's on June 8 assigned counterparty risk ratings to Portuguese banking groups Caixa Geral de Depósitos SA, Millennium BCP, Novo Banco SA, Banco Santander SA unit Banco Santander Totta SA, Banco BPI SA and Caixa Económica Montepio Geral caixa económica bancária SA.

Specifically, Moody's assigned long- and short-term local- and foreign-currency counterparty risk ratings of Ba1/NP to CGD and its branches in Paris and New York; Ba2/NP to BCP and its offices in Macau and Madeira; and B2/NP to Novo Banco and its branches in London, Luxembourg, the Cayman Islands and Madeira.

The rating agency also assigned local-currency counterparty risk ratings of Baa2/P-2 to Banco Santander Totta and its London branch; Baa2/P-2 to Banco BPI and its branches in the Cayman Islands, Madeira and Santa Maria; and B2/NP to Montepio.

The rating agency's counterparty risk ratings assess the ability of companies to honor the uncollateralized portion of nondebt counterparty financial liabilities, as well as the expected financial losses in case such liabilities are not honored.

The counterparty risk ratings are equal to or higher than the rated banks' senior debt ratings, reflecting the agency's view that secured counterparties to banks typically benefit from greater protections than senior unsecured creditors under insolvency laws and bank resolution regimes, and that this benefit is likely to extend to the unsecured portion of such secured transactions in most bank resolution regimes.