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Moody's acts on CYBG, Virgin Money following merger

Moody's on Dec. 14 took various ratings actions on CYBG PLC and Virgin Money PLC, concluding a review initiated June 21.

The actions follow the completion of CYBG's takeover of Virgin Money Holdings (UK) PLC in October.

The rating agency assigned CYBG long-term issuer ratings of Baa3 with a positive outlook and confirmed its Baa3 subordinated debt rating.

The long-term issuer and bank deposit ratings of Virgin Money PLC were upgraded to Baa1 from Baa2, with the outlook revised to positive. Moody's also upgraded its long- and short-term counterparty risk ratings to A2/P-1 from Baa1/P-2 and its long- and short-term counterparty risk assessments to A2(cr)/P-1(cr) from A3(cr)/P-2(cr), while confirming its "baa2" baseline and adjusted baseline credit assessments. Its short-term issuer and bank deposit ratings were affirmed at P-2.

At the same time, Moody's confirmed CYBG unit Clydesdale Bank PLC's long-term bank deposit ratings at Baa1, with the outlook changed to positive. Its "baa2" baseline and adjusted baseline credit assessments, A2/P-1 long- and short-term counterparty risk ratings and A2(cr)/P-1(cr) long- and short-term counterparty risk assessments were confirmed, while its short-term bank deposit ratings were affirmed at P-2.

The long-term issuer and senior unsecured debt ratings of Virgin Money Holdings (UK) were confirmed at Baa3, with the outlook changed to positive. Its short-term issuer ratings were confirmed at P-3.

The positive outlooks reflect the potential for the new group to boost its financial profile if it manages to implement its business and integration plans while containing the execution and operational risks stemming from the merger.