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Fitch downgrades several Costa Rican banks following sovereign action

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Fitch downgrades several Costa Rican banks following sovereign action

Fitch Ratings on Jan. 17 downgraded several Costa Rican financial institutions following a similar action on the country's sovereign ratings.

Banco BAC San José SA and Banco Davivienda (Costa Rica) SA's foreign currency long-term issuer default ratings were lowered to BB- from BB+. The local currency long-term issuer default ratings on both banks were cut to BB from BBB-, while their local currency short-term ratings were downgraded to B from F3. The rating agency assigned a negative outlook on the long-term ratings.

Banco BAC's viability rating was downgraded to "b+" from "bb" while the same rating on Banco Davivienda was lowered to "b+" from "bb-."

Meanwhile, Fitch dropped the foreign and local currency long-term issuer default ratings on Banco de Costa Rica, Banco Nacional de Costa Rica and Banco Popular y de Desarrollo Comunal SA to B+ from BB. A negative outlook was also assigned to these ratings.

The viability ratings on Banco Popular and Banco Nacional de Costa Rica were lowered to "b+" from "bb" while the same rating on Banco de Costa Rica was cut to "b+" from "bb-." The support ratings on these three banks were downgraded to 4 from 3.

Banco Internacional de Costa Rica SA, which is based in Panama, saw its foreign currency long-term issuer default rating lowered to B+ from BB, with a stable outlook assigned. The bank's long-term national rating was cut to BBB+(pan) from A+(pan) while its short-term national rating was downgraded to F2(pan) from F1(pan).

Lastly, Financiera G&T Continental Costa Rica SA's long- and short-term national ratings were upgraded to AA-(cri) and F1+(cri) from A+(cri) and F1(cri), respectively.

Fitch downgraded Costa Rica's long-term foreign currency issuer default rating to B+ from BB earlier in January, pointing toward the country's wide fiscal deficits and financing restrictions.