Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Bankia Cut to BB- by S&P on Recapitalization Doubts

March 25 (Bloomberg) -- Bankia SA, the Spanish lender that needed the most European bailout funds, had its debt rating cut by Standard & Poor’s on concern that steps to strengthen its capital won’t be as effective as anticipated.

Standard & Poor’s cut its long-term debt rating on Bankia by one level to BB-, or three levels below investment grade, the ratings company said in a statement today.

The Bankia group posted a record after-tax loss of 21.2 billion euros ($27.6 billion) last year as it cleansed its balance sheet by transferring 22 billion euros of assets to a bad bank. The decision to cut the debt rating reflects S&P’s view that steps to strengthen capital by converting 6.5 billion euros of hybrid debt into equity “will not be as great as we previously expected,” S&P said.

S&P said it also downgraded Bankia’s parent company, cutting the long-term debt rating on Banco Financiero y de Ahorros by one level to B-. The negative outlook on both ratings reflects “the difficult operating environment and the risk that the bank’s restructuring plan might not prove successful,” S&P said.

To contact the reporter on this story: Charles Penty in Madrid at cpenty@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.